PPI Banks Named

The Central Bank has announced the names of six banks under investigation for wrongly selling insurance products to customers.

Independent reviews have been ordered at each of the banks to investigate the selling of payment protection insurance, calculate the scale of the problem and pay restitution.

Payment protection insurance (PPI) is sold as a means to repay loans or credit card bills when people become sick or unemployed. Since August 2007, more than 300,000 PPI policies have been sold in Ireland.

It has subsequently been discovered that policies were sold to people who should not have qualified and who should not have been entitled to make a claim under it due to employment status or residency status.

The six banks currently under investigation by the Central Bank are Bank of Ireland, Allied Irish Banks, EBS, Permanent tsb, Ulster Bank and GE Money.

Customers of those banks have been advised they do not need to take any course of action at this point.

The Central Bank is advising people that the banks involved will be contacting them in the coming weeks to outline their compensation and action plans.

The Central Bank is also investigating PPI sales by other banks and credit institutions and is thought to be considering enforcement action and fines.

Director of Consumer Protection at the Central Bank Bernard Sheridan told RTÉ's Morning Ireland that lenders would be required to refund the premium paid or give the customer the option of retaining the insurance at the current price.

(IT/GK)