The Irish CCPC met with their French counterparts, DGCCRF, in Paris before Easter and discussed the complaints that Irish consumers have made regarding the sale of certain French Leaseback properties.
The CCPC held a meeting with Brian Hayes MEP on 25th April 2018 and discussed the issues. Brian has been a staunch supporter of owners and has raised the issues on behalf of owners a number of times. No owners were present at that meeting.
152 complaints were passed from the CCPC to the French Fraud department, DGCCRF, before the end of 2017 and the investigation of these complaints form part of the workload of the DGCCRF for 2018. A further 17 complaints were delivered to the DGCCRF in Jan 2018. These complaints are now under a statutory process.
The message seems to be that the CCPC have performed their role in collating the consumer complaints and following the EU process for the investigation of such cross-border complaints.
In brief :
- All complaints are closed now from a CCPC perspective (they won’t be sending any more complaints to France)
- The DGCCRF felt that if owners had a collective action it would help – numerous owners are taking legal action so it’s not entirely clear how the DGCCRF think it will help…
- There won’t be any compensation from this activity
- It is possible that the DGCCRF may carry out enforcement – including criminal prosecution
- Statute of limitations may apply to cases – though there was no clarity given as to what that limitation is..
- Companies may no longer exist – in many cases the companies that sold the properties no longer exist, however the individuals do…
- DGCCRF will not have any person as a ‘liaison’ and have indicated that only owners who have provided contact details will be contacted
- DGCCRF have a regional structure whereby different regions would be investigating the cases pertaining to their region
- There was no timeframe given for any conclusions from the DGCCRF
There was no clarity given as to the scope of the French investigation – whether the notaires, banks, operators were in scope, or the developers and sales agents.
There was no clarity given to any possibility of having lease contracts cancelled if it was concluded that they had breached EU law. (Though a child could tell you that either the law was breached and breach seriously, or the law was inadequate and seriously inadequate.)
In short, there was little to re-assure owners.
However, without pre-empting the outcome of the investigation, the DGCCRF can rest assured that Irish owners will not be going away any time soon …
European Commission – DG Justice and Consumers
The office of the Commissioner for Consumers continues to follow the situation closely. The Head of Unit, Marie-Paule Benassi has said the following :
..problems have been generated in the context of various French fiscal schemes aimed to promote investment in the housing rental market. To our knowledge several thousands of French citizens, as well as a considerable number of properties and intermediaries have been concerned by various types of problems related to these schemes. Some of the promoters and intermediaries are bankrupted, and in certain cases under criminal probes in France.
The Commission regularly presses DGCCRF authorities to come to conclusions about these cases. Such conclusions will then be transmitted to the UK and Irish counterpart authorities. The DGCCRF conclusions would serve to stop possible ongoing unfair commercial practices and to eventually launch public prosecution of the operators at fault. Further, these conclusions can be used in civil proceedings to obtain redress.
As you rightly pointed out, this complex matter unfortunately affects the livelihoods of thousands of investors.
In our communication to DGCCRF, which is part of the French Ministry of Economy responsible for fiscal incentives, we will stress the importance of taking measures to ensure that foreign investors are informed of the risks attached to such schemes.
CCPC Communications to Owners
The CCPC sent the following update to owners who had submitted complaints :
The CCPC has assisted the Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes (DGCCRF) by collating complaints received from consumers in Ireland and providing a preliminary assessment of the information provided. The preliminary assessments were sent to the DGCCRF in two phases; in October 2017 and January 2018.
On 29 March 2018, officers from the CCPC met with counterparts from the DGCCRF. The purpose of the meeting was to discuss the investigation that the DGCCRF has commenced in relation to potential consumer protection issues surrounding the Sale and Leaseback scheme that Irish purchasers entered into with French traders. The CCPC’s engagement with DGCCRF on this issue is through the Consumer Protection Co-operation Network; this is the network of authorities responsible for enforcing EU consumer protection laws in EU and EEA countries.
Following the CCPC’s meeting with DGCCRF, there are a number of key points to be brought to the attention of Irish purchasers:
- DGCCRF can only consider those complaints that were submitted to CCPC in 2017. These complaints were assessed and tables have been provided by CCPC to DGCCRF in October 2017 and January 2018. These complaints have already been allocated to the various national and regional investigation teams as part of their 2018 work programmes.
- Where complainants have not provided their contact details, DGCCRF will be unable to consider their complaint further.
- DGCCRF has indicated that the length of time that has passed since the schemes were entered into brings particular challenges, such as the time limit for proceedings, but also tracing traders/corporate entities involved in the concerned schemes.
- DGCCRF wishes to inform Irish consumers that for this specific issue, it has a criminal enforcement function which may be used to address breaches of French law by traders, where evidence is brought of such breaches. DGCCRF will not be in a position to seek compensation for any purchasers who might be found to have been subjected to such breaches.
At our meeting, the CCPC advised the DGCCRF that we will provide them with further assistance that they may request in the course of their investigation.
UK Owners and CMA
Regarding the situation with UK owners, Daniel Dalton MEP received a reply from the CMA on 22nd February which states that all relevant complaints have been passed to their French counterparts. However they do not give the exact number of complaints relayed. Furthermore, the CMA notes that there is not yet a timeframe for the investigation as various locations and their respective authorities are involved.
They state that CMA officials are in regular contact with DGCCRF about the French leaseback schemes and have been informed that work has commenced. They expect it will some months before the outcome is known.
Given the properties concerned are in a variety of locations this is a national investigation by the DGCCRF. They cannot give us a timeframe for the investigation..
Daniel Dalton’s office continues to follow the issue.