Urgent need to regulate debt collection industry
18 May 2010
A not-for-profit organisation that campaigns for legal rights called today for the regulation of debt collection in Ireland in the face of increasing contact by harassed debtors to its legal advice centres and information line.
Launching its annual report for 2009, FLAC Director General Noeline Blackwell said that the main story of the year for FLAC last year had been debt, having published its major report on the debt enforcement system, contributed largely to the Law Reform Commission's work in the area and engaged with legislators on finding short-term solutions to the growing debt crisis.
"While FLAC and its volunteers have been working on improving access to justice across a range of fronts, particularly in social welfare, civil legal aid and public interest law, the big focus in 2009 was on debt law reform. Demand for our help is rising sharply - our telephone information and referral line saw a 300 percent rise in debt calls, while our centres also saw a dramatic increase in people seeking help in this area."
"Our main concern about the impact of debt on consumers is that there seems to be little official urgency in tackling the enormity of personal indebtedness in Ireland. The options available to people to manage their debt are entirely inadequate. Changes are needed to both practice and legislation. Even as the Expert Group on personal and mortgage debt is in session, a number of short-term measures could be undertaken. One of these is the licensing of debt collectors," Ms Blackwell continued.
According to Ms. Blackwell, there are no regulations governing this area - anyone can set him or herself up as a debt collector. Nor is there a code of conduct, as there is in the UK. "Every day in Ireland, people tell us that they are being intimidated, bullied and harassed. There is an urgent need for regulation - the cost to individuals and families of the State's failure to regulate is very high. Even among debt collectors, there is a wish for regulation."
Ms Blackwell said FLAC was seeking a licensing system for debt collectors similar to the one used for moneylenders or credit or mortgage intermediaries. The organisation also called for a statutory Code of Conduct that is legally enforceable, covering issues such as frequency of contact, clarification as to for whom the collector is working and Garda involvement where appropriate.
"2009 was a special year for FLAC as it marked our 40th anniversary. We used it to honour the special contribution of our volunteers, because the support of volunteer lawyers has always been crucial to FLAC's pursuit of equal access to justice for all. However, as there is much work still to be done, we still need to rely on them to give much-needed legal advice and information to people all around the country," she concluded.
According to FLAC's Annual Report, its lo-call legal information line answered over 10,000 queries, up 10% on 2008, while the average number of queries to its evening centres around the country in 2009 increased by 9%.
- The annual report for 2009 is available to download online (in PDF format).
- FLAC (Free Legal Advice Centres) is an independent human rights organisation dedicated to the realisation of equal access to justice for all. It campaigns through advocacy, strategic litigation and authoritative analysis to contribute to the eradication of social and economic exclusion.
- Statistics from FLAC's telephone information line show a 300% increase in debt related calls from the public in 2009 compared to 2008 figures. Meanwhile debt-related queries to FLAC's centres have increased by 10%.
- At the end of March 2010 FLAC wrote to the Finance and Justice Ministers with a number of suggestions for short-term measures on personal indebtedness. You can view the letter online (in PDF format).