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Central Bank fines insurance company over €40,000 after customers overcharged

The Central Bank of Ireland found that Keystone Insurance overcharged 62 customers over five years.

Image: Shutterstock/Nopphon_1987

THE CENTRAL BANK of Ireland has fined an insurance broker over €40,000 after finding that customers were overcharged and given unclear communication on fees.

Keystone Insurance Limited has been fined €41,385 for six breaches of the Consumer Protection Code 2012 between April 2012 and December 2017.

The Central Bank found that over five years, at least 62 customers were overcharged a collective total of €9,964.36.

Keystone has since reimbursed the customers.

The Central Bank reviewed 265 invoices and found that communication of fees was unclear for 190 customers because the company did not bring fees to customers’ attention, meaning that customers were not fully aware of the fees being charged.

The Central Bank said Keystone provided “incomplete and unclear responses for information which led to delays in the investigation”.

A fine of €59,121 was determined appropriate by the Bank, which was reduced by 30% to €41,385 through a settlement discount scheme.

The Central Bank’s Director of Enforcement and Anti-Money Laundering Seána Cunningham said that the insurance intermediaries are “required to recommend the most suitable product(s) to meet their customers’ needs and to always act in their best interests”.

“The purchase of everyday financial products by consumers can be a complex and daunting process. Many consumers rely on professionals, in this case an insurance intermediary, to assist them,” Cunningham said.

“The Central Bank expects that all regulated firms should have adequate processes, systems and controls in place to ensure compliance with the Code, ensure staff are trained on the Code’s provisions, regularly check that they are in compliance with the Code and ensure that any failures that may occur are identified and rectified early,” she said.

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Cunningham said that the overcharging of customers and unclear communication from Keystone came as a “result of not having the adequate processes, systems and controls”.

“In addition, the Central Bank expects that all firms engage proactively with enforcement investigations and provide accurate and comprehensive information in response to Central Bank requests,” she said.

“This is the minimum level of cooperation that the Central Bank expects during the course of an investigation. Failure to do so, as in this case, will be reflected in the level of fine imposed.”

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