Launch of Legal Guide to Moneylending
3 January 2008
One of the oldest forms of borrowing has been highlighted in a new guide called "Moneylending and the Law" published by FLAC, the Free Legal Advice Centres.
In launching a guide to the rights of those who borrow from moneylenders, Noeline Blackwell, the director general of FLAC said, "We are publishing this guide now, at a time of year when money is tight, and there is pressure to repay, to remind those who borrow from licensed moneylenders that they do have rights which are protected by law." She warned: "Money borrowed from moneylenders is very expensive and borrowers should be very clear about their rights, to ensure that moneylenders do not overstep the legal limits."
Paul Joyce, FLAC's Senior Policy Researcher on consumer credit law, stated at the launch that though money borrowed from moneylenders is costly, it is regulated by the State and that moneylenders can lose their licences if they overstep the rules.
According to FLAC, practices which are tolerated by some creditors are not permitted with moneylenders. These include giving top up loans to clear an existing loan. Up front arrangement and administration fees, common in sub-prime lending mortgages, are expressly prohibited in moneylending agreements.
Pointing to figures from the Financial Regulator that about 300,000 people in Ireland used moneylenders in 2005, Paul Joyce commented that "Often a borrower will have little choice, especially in a crisis situation. In addition, although there may be other affordable sources of credit available, many borrowers see moneylending as convenient, as they can often make repayments on the doorstep and few questions are asked about their employment or credit status. Licensed moneylenders may also tolerate a few missed payments during an agreement and collect them later."
FLAC's booklet "Moneylending and the Law", sets out borrowers rights in a simple "question and answer" format and is available from FLAC's office at 13 Lower Dorset St., Dublin 1 or can be downloaded from its website.