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Dublin: 10°C Saturday 16 January 2021

Banks to refund €25m to customers over mis-sold policies

One in five of the PPI policies reviewed by the Central Bank were found to be in breach of its consumer protection code.

The Central Bank of Ireland in Dublin.
The Central Bank of Ireland in Dublin.
Image: William Murphy via Flickr

THE CENTRAL BANK of Ireland has said that one in five payment protection insurance (PPI) policies reviewed were found to be in breach of its code and banks will be required to pay out €25 million in refunds.

The figures were announced in an update from the bank on its ongoing investigation into the sale of these policies which ensure cover for loan payments if a person cannot work because of illness or becoming unemployed through no fault of their own.

Eleven financial institutions are in the process of reviewing and offering refunds to customers including Allied Irish Banks, Bank of Ireland, Bank of Scotland, Danske Bank, EBS, GE Money, KBC Bank Ireland, MBNA, Permanenttsb, RaboDirect Bank Ireland and Ulster Bank.

These banks have been required to undertake a review of their PPS sales since 2007 as it emerged that many of these policies were sold to people who did not need them or who did not meet the criteria.

“Following our initial investigation, we have required firms to undertake a review of PPI sales since July 2007, overseen by independent third parties, to write to all affected customers, and to offer a refund or retention of their PPI policyIn case of refund, premiums paid plus interest,” commented Director of Consumer Protection, Bernard Sheridan.

The Central Bank said there were approximately 350,000 policies sold since July 2007 included in its review and, to date, over half of these have been reviewed by the firms, of which around one in five have been found to breach the bank’s consumer protection code. Some €25 million has been identified for refund to those consumers whose files have already been reviewed.

The bank said it would continue to monitor the firms to ensure that their reviews have been completed by the end of this year.

Related: Central Bank names six banks which missold PPI to ineligible customers>

Read: Around 11,500 AIB credit card customers to be refunded over €3.1>

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