A voluntary redress scheme is being put in place for customers of card protection insurance by Homecare Insurance.
The move is at the request of the Central Bank, after information given to buyers showed some benefits which were not needed. The p[olicies were purchased through a number of credit card providers - Bank of Ireland, MBNA and Ulster Bank.
More than 160,000 people are believed to be eligible for pay-outs. The providers are writing to the affected customers.
Customers were told that liability for unauthorised use if a card was lost or stolen was covered by the card scheme. However, customers did not need additional insurance for this as their own card's policy generally covered it.
Bank of Ireland, MBNA and Ulster Bank are now in the process of contacting impacted customers who qualify for the redress scheme.
Director of Consumer Protection at the Central Bank, Bernard Sheridan "If you purchased or renewed one of these policies after August 2006 and have not received a communication, you should contact your credit card provider," he advised.