€67m refunded by banks over mis-sold PPI policies

Friday 07 March 2014 17.48
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Central Bank publishes its review on PPI policies
Central Bank publishes its review on PPI policies
The average refund being returned to people mis-sold PPI is around €870
The average refund being returned to people mis-sold PPI is around €870

Over €67m has been refunded to around 77,000 consumers who were sold Payment Protection Insurance by 11 credit institutions since July 2007. 

The figures are contained in a Central Bank report on a review it carried out into the sale of PPIs here.

In July 2007, the Central Bank introduced a consumer protection code which set out the circumstances and rules around which certain financial products could be sold.

Four years later, it commenced a review of the sale of payment protection insurance by 11 financial institutions since that date.

PPIs are a form of insurance to cover consumers for a period when they are paying back debt such as mortgages or personal loans.

In 22% of cases under review, the Central Bank found that the product was either not suitable for the policy holder, they were not eligible to benefit from the product or the institution could not show that it had complied with the Consumer Protection Code.

Over €67m has been refunded to consumers, including almost €5m in interest.

The average refund was around €870, but there were wide variances in the amounts paid as some related to mortgages and others to credit cards and less costly products.

Refunds were granted in the case of over 20% of the policies sold by the institutions in the period under review.

The lenders involved in the review included AIB, Bank of Ireland, EBS, GE Money, Bank of Scotland, Danske Bank, KBC Bank Ireland, MBNA, Permanent TSB, RaboDirect Bank and Ulster Bank.

The Central Bank said that around 6,000 consumers had not responded to letters notifying them that they were entitled to a refund. It added that in 5,000 of those cases, the amount to be refunded was in excess of €100.

Bernard Sheridan, Head of Consumer Protection with the Central Bank, said the bank was satisfied with the level of co-operation it had received from the institutions under review.

However, he did not rule out enforcement action against institutions that did not take part in the review but might be be found to have not complied with the code.

Mr Sheridan also declined to rule out further reviews into other products that may have been sold in contravention of the Consumer Protection Code.