If you think you've been sold a pup, act fast or lose out

THE uncovering of yet another banking scandal is wearyingly tiresome.

But yet again our two main "pillar" banks -- the ones we're bailing out in the hope they will get us out of this mess -- are having to refund customers for products that should never have been sold to them.

Payment protection insurance (PPI) seems like a fuzzy, warm, reassuring kind of a thing.

If you have a loan in the form of a credit card or mortgage, it will step in and make your repayments for you if you become ill or unemployed. One more thing you won't have to worry about when you are feeling low and vulnerable.

PPI policies are expensive but, uniquely in insurance, they are underwritten only after a claim is made. They are supposed to "protect" your income.

The assumption of all policies is that you have an income to protect. But, as the Prime Time programme last night showed, Bank of Ireland (BoI) and Allied Irish Banks (AIB) sold them to people who weren't ever going to be eligible, such as students and the self-employed.

They found this out only after they lost their job, or were suffering from cancer, heart attack or a stroke.

In an embarrassing climb-down, BOI is now giving back €1m to 1,500 customers who were mis-sold PPIs, and AIB a whopping €3.1m to 11,500 customers in the same boat. The scandal was uncovered on the back of similar claims in the UK. Over there, firms have had to refund £1.9bn (¤2.4bn).

The Central Bank here is on the backs of its members over the blunder, which certainly wasn't the product of "human error" or a computer glitch. These products were systematically, deliberately sold for maximum profit, even though they could never be used, because there was no assessment in advance of whom they were selling them to.

PPIs were sold by bank staff on commission, call centre operators making "cold calls" and, in some cases, were automatically "tacked" on to the end of another product, such as a car loan application, so it was unclear you were even buying it.

But if you've realised you were mis-sold a PPI policy and are busy looking for your documents to prove it, you face another uphill battle. It's not quite as simple as making a complaint.

Under Irish law, mis-selling comes under a "six-year rule". In other words, you can start proceedings to get a refund only if you discover the mistake within six years of taking out the policy.

For many of us, it's something we ticked a box on when we took out our mortgage - maybe 10 or 15 years ago. Tough luck, says Financial Services Ombudsman Bill Prasifka. You can swing for your refund.

In Britain, you can claim long after the wrong policy was sold and the action starts after you discover it, not after you signed away your money.

Here, customers are not so lucky and many won't be able to get the refunds due to them.

The six-year rule can be changed by a simple piece of legislation, but what's Bill, our protector, doing for the people?

Er, not a whole lot. It's not up to him, apparently. He's waiting on the politicians or the banks to sort it out.

Well, that'll work then.

Although we are unlikely to have a insurance mis-selling scandal of the proportions they've got in the United Kingdom, it's nevertheless a warning to customers to be ever more vigilant when buying financial products over physical ones that they can see, touch or use.