Fianna Fáil Finance Spokesperson Michael McGrath has urged consumers to review any payment protection insurance policies they may have to ensure they are being charged the correct amount and were not sold an inappropriate product.
Deputy McGrath raised the issue with the Minister for Finance Michael Noonan in the Dáil this week by way of parliamentary question and was advised that the Central Bank will be giving an update on its investigation into payment protection insurance mid-year.
Deputy McGrath commented, “The news today that AIB is repaying €3.1 million to 11,500 customers over discrepancies on optional insurance products sold with credit cards highlights widespread concerns about the sale and administration of payment protection insurance by financial service providers in recent years. In the case of AIB, the average repayment to customers is €270 so the amounts involved are quite substantial.
“The ongoing Central Bank investigation is focussed on the mis-selling of payment protection insurance policies to thousands of consumers. It seems that many consumers, including self-employed persons, were sold products they could never benefit from.
“The mis-selling of payment protection insurance has been a major scandal in the UK and British banks have put over €5 billion to deal with the problem. The scale of the problem in Ireland is not yet clear, but I expect the amounts involved will be very significant.
“The Central Bank must adopt a ‘get tough’ approach with financial service providers who sell inappropriate products to consumers or who fail to properly administer policies and I look forward to the report being issued on the matter this summer.
“Meanwhile, I would advise consumers to review any payment protection insurance policies they may have. If they do not have a copy of the policy to hand, they should contact their provider for a copy of the original documentation. Consumers should check the documentation to ensure the policy is appropriate for them and that it has been properly administered by the financial service provider in accordance with their instructions.”