THOUSANDS of consumers are set to share a compensation bonanza, it was revealed today.
A total of €25m is to be paid out to people who were mis-sold payment protection insurance, the Central Bank said.
Most refunds are likely to be small, but some could be as high as €2,500 each.
Eleven banks and finance houses have been ordered to refund customers who should never have been sold the insurance.
Payment protection insurance was sold with personal loans, credit cards and mortgages. It is designed to meet the monthly repayments if the policyholder becomes ill, has an accident or loses their job.
Around 350,000 policies were sold by banks since and card companies. 2007, and half of these policies have now been reviewed by the banks and card companies, regulators said today.
The Central Bank has ordered 11 lenders go back over their books and check who was suitable for and who was mis-sold payment protection insurance.
Director of Consumer Protection at the Central Bank Bernard Sheridan said: “To date approximately €25m has been identified for refund to those consumers whose files have already been reviewed. The Central Bank will continue to monitor the firms to ensure that their reviews have been completed by the end of 2013 and to our satisfaction.”
Large numbers of people have been mis-sold the insurance because certain types of consumer are excluded from ever making a claim on a payment protection policy.
Most policies exclude claims from people who are retired, the self-employed, homemakers, and part-time workers. These people should not have bought payment protection policies.
And thousands of other consumers did not know they had a policies, are also likely to get refunds for the premiums they have paid, plus interest.