THE Central Bank has been criticised for failing to regulate hire-purchase agreements.
The Free Legal Advice Centres (FLAC), which campaigns for equal access to justice, has claimed that some of the worst credit practices take place on garage forecourts when people are sold hire purchase for a car.
Despite this, the Central Bank has no plans to regulate this sector.
With a hire-purchase (HP) agreement, you don't own the car until you make the last repayment. This means you cannot sell the car if you run into problems making your repayments. Buying a car or another product with a loan means you own it immediately.
FLAC, which is headed by Noeline Blackwell, said hire-purchase and consumer-hire deals were not regulated by the Central Bank. Instead, they come under the ambit of the National Consumer Agency.
A consumer hire means the goods continue to be owned by the finance house.
FLAC said HP and consumer-hire deals should come under the Consumer Protection Code.
In its submission to the Central Bank, FLAC said it had seen HP agreements where substantial "balloon" payments have to be made before the motorist owns the car.
"How this could possibly be in the consumer's interest, when title only passes upon the making of the final payment under the agreement, is beyond our understanding," said FLAC.