Business Personal Finance

Thursday 14 December 2017

Thousands more in line for mis-sold insurance refund

'In 2011, the Central Bank told 11 financial firms to review sales of the product and pay back premiums and compensation.' (Stock photo)
'In 2011, the Central Bank told 11 financial firms to review sales of the product and pay back premiums and compensation.' (Stock photo)

Charlie Weston Personal Finance Editor

Thousands more people could be in line for refunds after being mis-sold insurance. So far some 77,000 people have been repaid close to €70m over the mis-selling of insurance, which is supposed to pay out when people lose their jobs.

There are now calls for the reopening of a redress scheme which has already seen thousands of people refunded money over the mis-selling of payment protection insurance.

Sinn Féin finance spokesman Pearse Doherty has written to Central Bank Governor Philip Lane seeking the widening of the redress scheme after a High Court ruling, the Irish Independent has learned.

His letter to the Central Bank identifies policies sold by GE Money, Permanent TSB and Ulster Bank where he says more cases should be examined.

Payment protection insurance pays a policyholder's loan or credit card repayment if they become ill or unemployed.

But the insurance was sold to thousands of people who were ineligible - who would be unable to claim under the policies.

In 2011, the Central Bank told 11 financial firms to review sales of the product and pay back premiums and compensation.

Now Mr Doherty has written to the Central Bank pointing out that its review has missed out on thousands more policies.

The sellers of the policies failed to disclose they partly or fully owned the underwriters of the policies, something that was not captured in the original Central Bank review.

The issue arose when GE Money lost a High Court case where the judge ruled its failure to disclose the ownership of the underwriter was capable of amounting to misleading commercial practice.

Mr Doherty has asked for a full Central Bank investigation.

"I ask the Central Bank to open a full investigation into this matter with the aim of shifting the onus to act from the individual consumers who may not know about the importance and effect of this ruling onto the lenders in question so they can put in place a redress scheme where appropriate," he wrote.

A Central Bank spokeswoman said: "The Consumer Protection Code, 2012, provides protections and mechanisms for consumers who wish to make a complaint in respect of a product or service purchased from a regulated financial entity, with further recourse available to consumers through the Financial Services Ombudsman if required."

It claimed it was prohibited from commenting on any named firm under section 33AK of the Central Bank Act 1942. Ulster Bank had no comment.

GE Money said: "Following discussions with the Central Bank of Ireland in 2013 we wrote to all live customers in line with what we had agreed with the CBI. We would like to stress that customers did not suffer any loss in relation to the matter."

Permanent TSB said: "We have no reason to believe that the appropriate information was not provided to customers at the point of sale in line with the relevant regulations that applied at the time."

It said it has no reason to believe that the appropriate information was not provided to customers at the point of sale.

Irish Independent

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