70,000 due refunds in insurance scandal
UP to 70,000 people are set to get refunds worth up to €3,000 each because they were mis-sold payment protection insurance (PPI), it has emerged.
Some 340,000 people bought the insurance products between 2007 and 2011.
But as many as one in five of those who took out these products in the past five years are likely to have been victims of the massive insurance scandal, experts said.
The Central Bank has told AIB, Bank of Ireland, Ulster Bank, Permanent TSB, EBS and American-owned GE Money to review their sales of payment protection since 2007.
One other unnamed finance firm has also been told to probe its sales of the product.
The Irish Independent understands that another half - dozen finance firms have been told by regulators to check if they also mis-sold the insurance product.
Asked if it had a problem with the sale of payment protection insurance, credit card supplier MBNA said it deals with customer complaints on a case-by-case basis.
"It is not our policy to disclose details of discussions we may have with regulators," MBNA said.
There was no response yesterday from insurer Genworth when contacted by this newspaper about the matter.
Financial institutions sold thousands of payment protection policies to people, including the self-employed, who could never make a claim under the terms of the policies.
The polices should not have been sold to the following categories of customer, who are precluded under the contracts from making a successful claim:
- Those under 18 or over 65.
- People who work less than 16 hours a week.
- The self-employed or unemployed.
- Those with pre-existing medical conditions.
- People on contract or who have a temporary job.
- Anyone told that taking such a policy out would help get the loan approved.
Payment protection covers the loans repayments on a car loans, credit card debt, or mortgage payments, if a person becomes ill and cannot work, loses their job or has a serious illness.
However, the contracts generally also have a clause delaying any payment for 13 weeks, or even 26 weeks.
And the payments protection insurance policies that cover mortgage repayments also have a clause denying a claim to anyone who could have suspected that they would lose their job.
When people did lose their job this was used as the basis to refuse payouts.
Consumers were warned last night that, under current legislation, if they took out a payment protection policy more than six years ago, they won't get a refund.
Last night AIB said its subsidiary EBS will start writing next month to customers who took out PPI polices since August 2007. It said there was no need for customers to take any action or engage a third party to make a claim. However, the bank said it will take a year for refunds to be paid.