Mis-sold policies to cost banks millions

Thousands of people mis-sold payment protection insurance (PPI) by six financial institutions are in line to be paid tens of millions of euro in compensation.

The Central Bank will today issue formal instructions to six named banks — Bank of Ireland, Allied Irish Banks, EBS, GE Money, Ulster Bank, and Permanent TSB — to commence reviews of all PPI sales since Aug 2007 and to contact as many as 300,000 policy holders to outline the approach they will be taking and the expected timelines for completion of their reviews and the payment of compensation.

The Central Bank is also extending its investigation to look at mis-sold PPI policies by other banks and credit institutions, having found the problem to be systemic in the Irish banking sector. The Central Bank is understood to be determined that where breaches are found customers will be “appropriately restituted” with premiums repaid in full and appropriate interest paid.