THE Minister of State for Consumer Affairs, Mr Pat Rabbitte, has clashed with the Consumers' Association of Ireland on the new Consumer Credit Act. Launching the Act yesterday, Mr Rabbitte sharply criticised a recent consumers' association survey which he said had suggested his office had "diluted" some of its original provisions.

Mr Rabbitte said that, while it was true to say that the Consumer Credit Act bore "little enough" resemblance to the original Bill, the new statute was "immensely better" in its protection of consumer rights.

Consumers' Association director, Mr Eddie Hobbs said he was "surprised" Mr Rabbitte should use his office to criticise the association.

"The Minister appears to be particularly sensitive to our criticism of the dilution of commission disclosure originally contained in the Bill," he said. The CAI is critical that, under the final terms of the Act, only commission in excess of an agreed industry level must be disclosed.

It says this enshrines a price fixing agreement between the life insurance offices in law, while it believes that there should be full disclosure of commission being charged by financial institutions, particularly for investment products.

Mr Rabbitte said the Act was the most "enlightened" and "far reaching" legislation for the protection of consumers in the State's history. He said it represented a long overdue and much needed reform of the unequal and unfair relationship that has existed between credit institutions and borrowers.

The CAI said yesterday it greatly welcomed the Act as a significant and comprehensive step forward in regulating the behaviour of mortgage lenders.

The CAI said it looked forward to discussing the disclosure commissions with Mr Rabbitte.