Monday, October 08 07:59:50
The Central Bank has named six banks that it is investigating for wrongly selling insurance products to thousands of customers. The banks have been ordered to carry out independent reviews of the sales of the payment protection insurance to find out the scale of the problem, and pay restitution. Payment protection insurance or PPI repays a loan or credit card if a person becomes sick or unemployed. Since August 2007, over 300,000 PPI policies were sold in Ireland.
But it has now emerged that many of those policies were sold to people who should not have qualified for them, and would not be entitled to claim if things went wrong, because of their employment status or residency status. Bank of Ireland, AIB, EBS, Permanent TSB, Ulster Bank and GE Money are all being investigated by the Central Bank. Customers of those banks are advised that they do not need to do anything at this point. The Central Bank says many have been contacted by claims management companies, who may charge fees of up to a quarter of any refund due.
Instead, it is advising people that the banks involved will be writing to them in the coming weeks to outline their approaches to the review and how they intend to compensate them. The Central Bank is investigating PPI sales by other banks and credit institutions. It is also considering enforcement action, or fines, for those responsible.