Central Bank Review of PPI Policies
Overview
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 (so far half of these have been reviewed).
- The Central Bank notes that 20% of 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 miss-sold PPI.
- Most of the refunds are said to be small, though some could be for approx. €2,500.
The financial institutions that miss-sold PPI must write to all affected customers and offer them a choice of refund or retention of their PPI policy. Any refund will include compensatory interest.