Credit union debtors more likely to go to jail than bank debtors, says Flac

 

A PERSON who does not pay back a loan is more likely to go to prison if the debt was with a credit union rather than with a large bank, legal aid organisation Free Legal Advice Centres (Flac) has said.

Ahead of a conference on human rights yesterday, director general of Flac Noeline Blackwell said the bigger banks tended to see imprisonment as useless because it did not force the person to pay the debt. “Very often it is credit unions that pursue people to the point where they end up in jail,” she said.

In the last five years, 1,000 people were jailed for non-payment of debts. They spent on average 21 days in prison and when they were released, they still owed the debt.

The United Nations Human Rights Committee has recommended Ireland change its laws so that no one is imprisoned “for the inability to fulfil a contractual obligation”.

Although there were no statistics, Ms Blackwell said the cases Flac heard about tended to be merchants who did not get bills paid and credit unions, rather than the big banks.

“They deal with it in a less strictly commercial way and in a more personal way,” she said. “They see it nearly as a slight on the community when someone doesn’t pay their debt and very often they put people in prison so other people will continue to pay their debt.”

Ms Blackwell said no civil society should seek to put one person in jail in order to ensure another person paid a debt. She called on the Government to immediately end imprisonment for non-payment of debt.

A spokesman for the Irish League of Credit Unions said credit unions utilised every available avenue to avoid court, including the renegotiation or rescheduling of problem loans.

“It is the act of disobeying an order of the court that may result in imprisonment,” he said. “In that sense, the matter is out of the hands of a credit union whose involvement was merely in securing an instalment order for the repayment of a loan.”