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LEAH FARRELL

Buy-now-pay-later firms offering 'indirect credit' must now be authorised by the Central Bank

The regulator has also placed an interest rate cap of 23% APR on all consumer credit agreements.

THE CENTRAL BANK of Ireland has widened its consumer protection rules to cover so-called ‘buy-now-pay-later’ (BNPL) firms.

It means companies offering “indirect credit” to customers, allowing them to spread the cost of purchases over instalments while charging them interest, will now need to be authorised by the regulator, the Central Bank said in a statement.

It follows the commencement of the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022, which was signed into law last month by Minister for Finance Paschal Donohoe.

Firms that offer hire purchase agreements such as hire purchase, consumer hire, Personal Contract Plans (PCPs) and BNPL must now register with the Central Bank as either a Retail Credit Firm or a Credit Servicing Firm.

Indirect lenders provide credit to consumers by paying the retailer directly and then charging the consumer interest on future repayments.

Under the regime, the regulator has also capped the interest rates firms can charge customers for credit agreements at 23% APR.

They must also notify the Central Bank if they plan to introduce any new charges or increase their rates.

Firms that have been providing such services up until now can avail of transitional authorisation agreements, the Central Bank said.

In a statement today, Gerry Cross, Director of Financial Regulation, Policy and Risk at the Central Bank, said, “We welcome this legislation as it closes a gap so that providers and servicers of hire purchase, including PCP, consumer hire and indirect credit (e.g. BNPL) will now need to be authorised by the Central Bank.

“Extending our consumer protection framework to these firms will ensure that Irish consumers receive the same protections that we require of other financial service providers. Our aim is to ensure that consumers have the same level of protection no matter where they source their financial services.”

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    Mute Paul Roche
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    May 12th 2014, 8:45 PM

    The bigger they are, the slower they pay.

    148
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    Mute The Hooded Biscuit
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    May 12th 2014, 11:52 PM

    So true, got to the stage with my business where I have refused work from some large businesses who think I should be grateful, not worth it for the pain of constant chasing and chasing.

    22
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    Mute Ian Mac Eochagáin
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    May 12th 2014, 9:18 PM

    “Payment managers”? Intrum Justitia are debt collectors who use underhand methods (anonymous voicemail messages and hand-delivered notes) to chase up debtors. If everyone started paying their bills on time Intrum would go out of business.

    That’s not exactly true about Finland. Well, maybe the stats are, because people are more disciplined. Here if you forget to pay a bill (which has happened to me once or twice) it takes them a week or two to notice and then they send you a reminder.

    57
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    Mute Jimbo
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    May 12th 2014, 8:33 PM

    Well that sucks balls.

    51
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    Mute Noble Gas
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    May 12th 2014, 8:50 PM

    We pay after 65 days – contracts says 30. Drives the Germans and French suppliers banana’s

    40
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    Mute Crocodylus Pontifex
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    May 12th 2014, 9:04 PM

    Not as bananas as that unnecessary apostrophe is driving me.

    76
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    Mute Joseph Siddall
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    May 12th 2014, 9:14 PM

    Noble Gas, …..and you’re proud of that fact ? Suppose your company don’t expect it’s customer to honour payment terms so they can take the p1ss as well. Pathetic excuse for management.

    56
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    Mute Kevin Higgins
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    May 12th 2014, 8:45 PM

    Jobs jobs jobs, FG can’t even do that right and it’s all they do. Skew figures

    39
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    Mute Gaucho Doyle
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    May 12th 2014, 10:21 PM

    Getting paid business to business in sixty days would be good in Ireland. It’s more like 90 to 120, you ask some campanys to pay you after 30 days and they look at you like you have two heads and then come up with any accounting excuse not to pay you. ‘Oh we won’t be doing a cheque run till the end of the month’, ‘One of the directors is away at the moment, so we won’t be able to issue a cheque till he’s back’ bla bla bla Then why do you order these goods and services!!!!!!!!!

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    Mute Happy Go Lucky
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    May 12th 2014, 10:45 PM

    You forgot the cheque is in the post…

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    Mute blah!
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    May 12th 2014, 9:07 PM

    Ok maybe I’m missing something, the article, in paragraph two, refers to “unpaid bills”, then further on states that for business to business, payments are made around 29 days with 14 days the norm for public sector payments. Prompt payment legislation, as far as I know, requires payment to be made within 30 days from receipt of invoice. These are not “unpaid bills” or “late or non-payment of debt”. Maybe 30 days is too long in our digital age but at least call it what it is. On time, legislatively compliant payments. Or perhaps the problem is elsewhere, lack of credit to cover the 30 day period. That would be the banks again….

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    Mute Dave Mac
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    May 12th 2014, 9:48 PM

    Intrum justicas sales manager!!

    He just let slip that you don’t have to pay them!

    Idiot!

    26
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    Mute Simon O'Keeffe
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    May 12th 2014, 9:34 PM

    Doh! What do they think jobsbridge was created for.

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    Mute Patrick Linehan
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    May 12th 2014, 10:47 PM

    It’s called the Tragic Roundabout. I can’t pay A because I haven’t been paid by B who’s owed money by C.

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    Mute Lisa Saputo
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    May 12th 2014, 11:55 PM

    Are debt collectors called payment managers now?

    13
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    Mute Christopher O Callaghan
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    May 18th 2014, 1:16 AM

    Payment managers/credit controllers/credit management advisors etc

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    Mute Christopher O Callaghan
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    May 18th 2014, 1:16 AM

    Payment managers/credit controllers/credit management advisors etc

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    Mute GATHERINGYOURMONEY14
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    May 12th 2014, 11:38 PM

    The bust shmall chounthry ta doo bwisnish in.
    Because you don’t have to pay your suppliers.

    8
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