One more lender to be named for PPI mis-selling
The six banking institutions already named are: Bank of Ireland, AIB, EBS, Permanent TSB, Ulster Bank, and GE Money.
The Central Bank review only goes back as far as Aug 1, 2007, but customers who feel they were mis-sold products prior to this can appeal to institutions directly. If they are not satisfied they can then contact the Financial Services Ombudsman, who will look at complaints under the 2012 consumer protection code.
All of the institutions said they are complying with the Central Bank investigation and that they will be in touch with their customers in the near future.
It is expected the banks will have to pay out tens of millions or euro in compensation. The Central Bank is also examining what fines will be levied against the banks on top of the costly compensation payment.
Permanent TSB said it welcomed the industry-wide review because it would end speculation on whether or not the kind of practices that resulted in multimillion-euro payouts in the UK had operated in Irish institutions.
A spokesperson said: “We welcome this industry-wide review because it will draw a line under this issue once and for all.
“If any mistakes were made, we need to identify them and if customers were disadvantaged we need to acknowledge that and correct their positions.”
Permanent TSB said it is committed to taking out advertisements in newspapers as well as writing to all affected customers before Nov 16 to inform them of its plans.
Ulster Bank has also said it will be in contact with customers by Nov 16. The bank, which has already paid out €35m as part of a compensation package this year following a massive computer failure, said it was co-operating fully with the Central Bank.
Bank of Ireland said it would contact customers before the end of November who may have been sold inappropriate policies.
AIB said it was seeing a high level of successful claims under PPI policies. AIB said that from 2008-11, about one in five AIB policyholders claimed on their PPI, and that four out of five claims were successful.
AIB said it will start contacting affected customers on Nov 5, but expects the whole exercise to take a year.
All of the banks and the Central Bank insisted that customers did not need to contact any external firms to claim their PPI compensation.
However, Dublin-based law firm McHale Muldoon, which is acting for over 1,000 clients, said it was appalled at the advice.
Partner Michael Muldoon said that banks were trying to escape their liability by stalling for six years.
“If a consumer who was sold PPI in, say, Oct or Nov 2006 heeds the advice of the Central Bank and does nothing, and their complaint is ultimately rejected (which is likely), it will be too late for them to submit their claim to the [ombudsman] and they have no avenues open for redress,” he said.
“This will play into the hands of the financial institution who are already delaying in dealing with complaints and are relying on the six-year rule.”
What is payment protection insurance?
Payment protection insurance (PPI) protects you if you cannot work for reasons such as illness, accident, or unemployment. The insurance will cover the repayment of loans, such as mortgages or term loans.
Why is there a PPI review?
The Central Bank of Ireland is conducting an industry-wide review of all sales of all PPI policies from Aug 2007 to date to ensure policies were sold in line with the requirements of the Central Bank of Ireland’s Consumer Protection Code. The regulator believes some people were knowingly sold policies they would never be able to claim on.
What does this review consist of?
This review will look to ensure that the sales of PPI were suitable and that all necessary information was provided. The Central Bank’s main concerns are firms not gathering sufficient information, failure to bring key information on policies to the attention of individual consumers, and poor record-keeping and incomplete files.
Who is conducting the review?
The review is being conducted by the banks and is being overseen by independent third parties.
Do I need to do anything?
A: Customers who feel they may have been mis-sold products after 2007 will be contacted by the banks. If you were sold a product before 2007 you should contact the seller and if you are still not satisfied you should take your complaint to the Financial Services Ombudsman.
When will I know the outcome of the review?
All policies sold since Aug 1, 2007 to date are included in the review and it is expected that it will take up to a year to complete.
I have already cancelled my policy. Am I still part of the review?
Yes, you are still part of the review as you took out a policy since Aug 1, 2007. Even if you previously cancelled your policy this does not preclude your involvement.
I didn’t know I had a policy. Do I need to get in touch with the financial institution?
No immediate action is required by you. The banks will be in touch with you as the review progresses.
Does the review affect my ability to submit a claim as normal on my policy?
No. If you have to make a claim during the review period, this will be dealt with through the normal channels.
If the review finds my policy was not sold to me in line with the requirements, what happens then?
If this is the case, you will be offered redress and compensation.
If I am entitled to redress, how and when will it paid?
It will be issued to you directly once the review of your case is completed. The payment will be made directly to the customer named on the PPI policy and will not be made payable to any third party.
If I am entitled to redress, will I receive interest/compensation?
Yes, if you are entitled to a refund, interest is calculated on a compounding basis for all years charged up to and including 2012.
