On 3 October 2013, the Central Bank of Ireland provided an update on the current review of payment protection insurance (PPI) sold from 1 July 2007 to 30 June 2012. The usual purpose of PPI is to assist a policyholder in meeting their repayment commitments where the policyholder:
- Suffers from critical illness
- Is involved in an accident
- Is rendered unemployed
PPI was typically sold with personal loans, credit cards and mortgages.
The review included 350,000 policies, of which over half have so far been reviewed. The Central Bank notes that 20% of the policies sold have been found to be in breach of the Consumer Protection Code.
To date €25 million has been identified as refundable to customers that were mis-sold PPI. Most of the refunds to each individual are likely to be small, though some could be for approximately €2,500. The financial institutions that mis-sold PPI must write to all affected customers and offer them the choice of a refund or retention of their PPI policy. Any refund will include compensatory interest.
Contributed by Grant Murtagh.
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