Refund letters on way over mis-sold insurance
SOME of the thousands of people mis-sold a special insurance by banks will get letters next week telling them if they are to get refunds.
The Central Bank has ordered 10 lenders to write to people it is thought were mis-sold payment protection insurance and outline to them whether the banks think they are due refunds.
It is understood that refunds will average around €2,500.
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 330,000 policies were sold by banks during the boom in 2006 and 2007. But many were mis-sold because certain types of consumers are excluded from making a claim on a payment protection policy.
Most policies exclude claims from people who are retired, self-employed, homemakers, or part-time workers; policies should not have been sold to them.
Thousands of other consumers did not know they had such policies and are also likely to get refunds for the premiums they have paid, plus interest.
Now the Central Bank has told AIB, Bank of Ireland, EBS, GE Money, Permanent TSB, Ulster Bank, Bank of Scotland (Ireland), Danske Bank, RaboDirect and KBC Bank to start issuing letters to those who took out the policies.
The consumer can decide to accept a refund, or if they feel it is a useful policy, they can keep it, according to the Central Bank's director of consumer protection, Bernard Sheridan.
The 13,000 cases initially being dealt with are from July 2007. The lenders will then have to work through policies from that period on.