2.4.4Investment Business relating to Consumer Credit Transactions


Again, as previously highlighted at the end of Section 2.2.3, you are reminded that the main thrust of this website-book is directed towards the pervasive abuse of the 'consumer' by Financial Services Institutions, and that it is therefore the term 'consumer' that is predominantly used.

However, notwithstanding the use of the limiting term, 'consumer', in the title of this Section, and in the title of Section 2.5 and Section 2.6, and throughout the text of all the Sections within Section 2.5 and Section 2.6, it will be seen that, within these Sections, the only statute that actually confines its scope to 'persons' limited to the status of 'consumer' is the Irish Consumer Credit Act 1995 (see Section 2.6.2).

So, ——— be mindful of the broader significance of the terms 'person', 'client' and 'customer', as used within the wording of the various Statutes, and of the fact that (with the singular, and very much inconsequential, exception under Irish statute noted above) these Acts are not limited in their regulatory scope to dealings with persons with the specific status of 'consumers'.

A detailed assessment of the important provisions (as pertaining to the subject matter of this book) within the Statutory Legislation governing Investment Business relating to Consumer Credit Transactions, for both the U.K. and Ireland, is set out in the following two Sections. The language of these Statutory Provisions, and of the many Rules and Codes they encompass, lacks the stimulus the judiciary impart to the Common Law and, when one is also ignorant of the specifics covered by such provisions, makes for somewhat tedious reading. The full import of the power of these provisions, in the case of U.K. legislation, and of the marked weakness of same, in the case of Irish legislation, will only be seen in the light of the knowledge you will gain in the Chapters that follow.

Note! While the U.K. and the Irish positions are assessed separately, there is much to be learned from a study of both, particularly in their many specific manifestations of the precedents of Common Law to the activities of those dealing in Investment / Credit transactions.

Note! In the United Kingdom,
the Financial Services Act 1986 was the foremost legislation governing the Financial Services Industry until its repeal, on 1st December 2001, following activation of the Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001. This Order, by giving full effect to the provisions of the Financial Services and Markets Act 2000, gave the Financial Services Authority (FSA) a full range of statutory powers and made it (the FSA) the single regulator for the financial services industry.

However, as the Financial Services and Markets Act 2000 further endorsed the substantive provisions already codified within the predecessor Financial Services Act 1986, and as many of the breaches of Law we will expose in this book occurred within the timeframe that predates the enactment of the Financial Services and Markets Act 2000, it is a study of the Financial Services Act 1986, and of the subordinate Self Regulating Organisations’ Conduct of Business Rules, that has the most relevance to the victims of Financial Services Institutions.

Note! In Ireland, the Regulatory Regime was such that, prior to the 1st November 2001, regulation of Life Assurance type investment business was solely Self Regulation by the Insurance Industry. It was not until 1st November 2001, through power of the Insurance Act 2000, that the activities of Life Insurance Companies and Investment Intermediaries came under the direct regulatory control of the Central Bank and, thereby, became subject to the Central Bank's various Code of Conduct requirements. The Irish Financial Services Regulatory Authority (IFSRA) was formed in 2003, and was given further powers under the Central Bank and Financial Services Authority of Ireland Act 2004.

However, it will become clear in the Sections that follow that the Irish consumer has been, continually, poorly served by the Irish legislature, and by the Competent Authority guiding it, in the matter of protection against the abuses perpetrated by Financial Services Institutions and their Management Personnel. And, it is therefore within U.K. Financial Services Legislation (as distinct from Regulation) that the Irish consumer (and lawyer) must look to gain knowledge of what exemplifies a whole-hearted effort at Justice.

The substantive express provisions within the U.K. Financial Services Act 1986 (which came into force on 29th April 1988), and within the Regulatory Authority Rules governed by this Act, constitute a focused codification of Common Law Duty on the activities of Financial Services Institutions. These specific manifestations of Common Law Duty will therefore also have a specific interpretative relevance to consumers / customers whose dealings with Financial Services Institutions do not come within the ambit of the U.K. Financial Services Act 1986, in particular, U.K. consumers / customers whose dealings with a Financial Services Institution predate the 29th April 1988 and are also outside the jurisdiction of the Financial Ombudsman Service, and ALL Irish consumers.

Note! While you may be encouraged when you discover some breach of a Statutory provision that relates to your personal situation, or when it becomes evident that some express Rule, within the U.K. Financial Services Conduct of Business Rules and subject to the statutory power of the U.K. Financial Services Act 1986, gives clear and specific codification to a duty of Common Law, NEVER be dissuaded from applying the considerable powers of remedy available to you under Common Law, and under Statute Law, in the matter of Misrepresentation! (These will be discussed in detail in Section 2.8.)

Note! On the matter of Statutory Legislation governing Investment Business relating to Consumer Credit Transactions, specific legislation, requiring that the total cost of credit be expressed as an annual percentage of the amount of credit granted, and specifying the manner in which this ‘annual percentage rate of charge’ (APR) should be calculated, will be discussed in Chapter 6. So too will the consequences for the consumer of the failure by Financial Services Institutions to provide this information.



READ Section 2.9: The Time Limit for Legal Action !




It is imperative that all Irish consumers (and lawyers) study the following Section in its entirety, i.e. Section 2.5 —— THE UNITED KINGDOM POSITION.


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