Bank probes card insurance sales

The Central Bank is investigating the sale of credit card identity insurance following an agreement to pay over €1 billion in compensation to customers in Britain.

Last week UK-based insurer CPP agreed to compensate seven million people who were mis-sold insurance alongside credit and debit cards.

The company has approved a compensation package worth £1.3bn (€1.5bn) — an average payment of £200 per customer who was mis-sold CPP identity insurance.

In Ireland both Ulster Bank and Bank of Ireland sold the CPP products in question to Irish customers.

A spokesperson for Ulster Bank confirmed that they had sold the product in question here.

“The CPP product was previously sold to Ulster Bank customers.

“We have provided information regarding this product to the Central Bank at their request,” a spokesperson said.

Bank of Ireland sold the products in both Ireland and England but was not named in the UK financial watchdog’s review of the product.

The Central Bank refused to comment on any investigation into the sale of the products in Ireland.

The insurance products that were sold were CPP Card Protection and Identity Protection, but these were often sold directly to customers by banks and credit card issuers which renamed the policies.

In Britain the Financial Services Authority found that people were often sold cover that they had already received from their bank or credit card company.

The policies sold emphasised that customers would benefit from £100,000 worth of insurance cover if their identity or card was stolen. However, these customers were already covered by their banks and the UK regulator found that the insurance company overstated the risks and consequences of identity theft.

The investigation in Britain found that customers were sold the insurance when they rang up to activate new credit cards.

It is understood that the aggressive sales tactics used in the UK were not employed in Ireland.