Noonan urges caution on credit deals

Four nation consumer campaign targets 18 to 35 year-olds

Minister for Finance Michael  Noonan says it is crucial for consumers to know their rights before they took out credit. Photograph:   Julien Behal/PA Wire

Minister for Finance Michael Noonan says it is crucial for consumers to know their rights before they took out credit. Photograph: Julien Behal/PA Wire

 

From Dingle to Nicosia via Madrid and Valletta, young adults will be targeted in a major information campaign about their rights in consumer credit deals.

The campaign was launched in Dublin by Minister for Finance Michael Noonan and EU Commissioner for Health and Consumers Tonio Borg.

Young people between 18 and 35 will be targeted to raise awareness about their entitlements before they sign a credit agreement.

Last year Irish households owed €143.7 billion in personal debt and a survey of Irish consumers showed 35 per cent had signed at least one credit deal from €200 to €75,000 in the previous two years.

The survey also showed just 48 per cent of consumers believed themselves knowledgeable about consumer credit rights, while only 12 per cent knew they had the right to receive a draft credit agreement before they signed.

The campaign is being introduced in four EU countries - Ireland, Spain, Cyprus and Malta, said Mr Borg, former Maltese prime minister.

Mr Borg said the four countries were chosen because they were correctly applying the EU consumer credit directive.

Mr Noonan said it was crucial for consumers to know their rights before they took out credit.

He said the platform of Ireland’s presidency of the EU was “an excellent opportunity to enhance knowledge among Irish consumers of their rights”. The campaign slogan is “Need credit? Don’t just sign. You have rights.”

The directive sets out rights, protections and obligations to assist consumers make informed choices in credit agreements. The information campaign will go “from Dingle to Nicosia via Madrid and Valletta” the commissioner said.

A former lawyer, he said most court litigation stemmed from the fact that “people sign something that they don’t know what they are signing” and “financial contracts are too important not to be handled with care and full awareness”.

The campaign focuses on five key rights from the directive - the right: to change your mind; to transparent advertising; to pre-contract information; to clear information in the contract; and to repay early.