ELECTRONIC TRANSFER OF FUNDS

HC Deb 07 May 1987 vol 115 cc879-80

Lords amendment: No. 51, after clause 88, insert the following new clause— — After section 187(3) of the Consumer Credit Act 1974 (arrangements to be disregarded in determining whether a consumer credit agreement is to be treated as entered into in accordance with prior or in contemplation of future arrangements between creditor and supplier) there shall be inserted— `(3A) Arrangements shall also be disregarded for the purposes of subsections (1) and (2) if they are arrangements for the electronic transfer of funds from a current account at a bank within the meaning of the Bankers' Books Evidence Act 1879.'

Mr. Ian Stewart

I beg to move, That this House doth agree with the Lords in the said amendment.

The amendment involves a new clause that is designed to clarify the existing law as it affects banking transactions carried out with the latest technology. Without the amendment, there would have been some uncertainty about the position under the Consumer Credit Act of electronic transactions on a current account by means of a plastic card. It can be difficult for the law to keep pace with such changes, and the amendment, which is designed to remove a possible constraint on the development of an important project in electronic banking — electronic funds transfer at point of sale— was and is welcome, and I am glad that it has been incorporated in the Bill. It is one item to which the banks attach considerable importance in planning their developments in the area, and for that reason it has been taken ahead of other matters that have been referred to the review of banking services law in general.

Dr. McDonald

I do not wish to oppose the amendment. Nevertheless, it is somewhat surprising to find legal obstacles to the introduction of EFTPOS being dealt with at this stage of the Bill, and, as the hon. Gentleman has just said, in advance of a full review of banking services. He will no doubt be aware that consumer associations and consumers in general may have certain anxieties about the way in which such systems may operate, and may be concerned about whether their interests are properly protected. I want to put on record the fact that the Opposition, while not opposing the amendment, express doubts about the wisdom of removing legal obstacles without ensuring that sufficient consumer protection has been built into the legislation. I should be interested to know what thought has been given to that matter.

I understand that the banks wish to move ahead with EFTPOS, and that this is an opportunity to remove any possible legal obstacles, doubts or misgivings, but the Government have not paid sufficent regard to consumer protection in this case.

Mr. Stewart

I note what the hon. Lady has said. I am glad that she did not oppose the provision, which was discussed in the Government's original White Paper and has therefore had a wider currency than other matters relating to the law as it affects the relationship between banks and their customers.

As far as I am aware, there is no decisive reason on grounds of consumer protection why we should not go ahead with the provision now, particularly because if we do not plans for the arrangements would be put back, possibly for an indefinite period. The review of the banking services law will examine the whole area and now that the provision has been incorporated in the Bill the banks will be able to take that into account in considering other related matters concerning the transfer of funds and the interests of consumers. However, I take the hon. Lady's point.

Question put and agreed to.

Lords amendment No. 52 agreed to.