Sizeable refunds are now being issued for policies that had been mis-sold.
Thousands of Irish policyholders are applauding the great insurance news that has just been released, stating that refunds of up to €3,000 each are being issued to compensate for the massive scandal among the major banks.
The Central Bank has required them to find out how many payment protection policies had been mis-sold.
The scandal was vast enough that the Central Bank also went on to specifically name six of the lending institutions that had taken part in it – an action which is quite unusual in situations of this nature. Four of those lenders were at least in part owned by the state. Those lenders include Barclay Bank, Permanent TSB, AIB, EBS (effectively nationalized), the Bank of Ireland (which is partly owned by the state), GE Money (a subprime lender) and Ulster Bank.
Each have made insurance news with their order to contact each owner of mis-sold policies.
The coverage that was supposed to be sold in this insurance news, was payment protection, which is meant to repay mortgages, loans, or credit cards in the event that the policyholder should suffer an accident, lose a job, or die while still owing.
However, thousands of the policies of this nature made insurance news when they were sold to individuals – such as those who are self-employed – who would never be able to meet the terms of the coverage in order to make a claim.
These policies were sold alongside auto loans and were targeted toward customers who were taking out new credit cards. Experts have expressed significant worry regarding the scope of the issue. From 2008 through 2011, there were approximately 300,000 payment protection policies sold.
Among those who were mis-sold the policies – numbering in the estimated tens of thousands – refunds could be returned to them worth anywhere from €2,000 to €3,000. It is hard to determine what the end cost of this will be, but the estimate so far, is looking to set back the British financial services industry more than £10bn.