Banks ordered to undertake review of PPI sales

The Central Bank has ordered seven financial institutions to conduct a comprehensive review of the way they sold Payment Protection Insurance (PPI).

The review follows the Bank's latest inspection as part of the ongoing investigation of the sale of PPI, and is to take place on all sales since August 2007.

The Bank's Director of Consumer Protection, Bernard Sheridan, has ordered the firms in question to submit plans on how they will carry out the review - and make refunds where necessary.

"The Central Bank has met with, and written to, the inspected firms requiring them to conduct a detailed review of all their PPI sales from August 2007 to date," a Central Bank statement said.

"This will be overseen by an independent third party.

"In advance, we are requiring these firms to submit detailed plans for how they will conduct their review, including contacting affected consumers and making refunds where necessary.

"We will carefully assess their plans and put in place monitoring arrangements to ensure that all firms take a fair and consistent approach to their review."

The move is part of a Central Bank investigation into the mis-selling of PPI which has found the problem was systemic.

The probe has concentrated on the mis-selling of PPI to customers who were ineligible to be insured under such policies, e.g. the self-employed, those close to retirement, and those on contract.

The main years under investigation are 2008, when close to 140,000 PPI policies were sold, and 2009-2011, when a further 136,000 policies were sold.

PPIs cover mortgage, loan and credit card repayments in the event policyholders become ill, are involved in an accident or become unemployed.