The Irish Central Bank today released the findings of its latest inspections of the sale of Payment Protection Insurance (PPI).
As as a result, the Central Bank is requiring all of the the seven firms inspected to carry out a comprehensive review of all their PPI sales from August 2007 onwards. The review is to be overseen by an independent third party.
The seven companies under review have not been named for some reason.
All the firms involved are also required to submit detailed plans for how they will conduct their review, including contacting affected consumers and making refunds where necessary.
The Central Bank say they will assess their plans and monitor progress to ensure that all firms take a fair and consistent approach to their review.
The Central Bank is also currently considering possible enforcement actions in respect of a number of firms .
The Central Bank’s main concerns arising from the PPI inspection are:
Firms not gathering sufficient information to enable them to determine whether the product sold was suitable for the consumer;
Firms treating certain sales as ‘execution only’ without complying with the relevant requirements of the 2006 Code;
The timing of the provision of key information to consumers by firms;
Failure to bring key information on policies explicitly to the attention of individual consumers; and
Poor record keeping and incomplete files.
Bank of Ireland and AIB have already paid out some PPI compensation – but there could be millions more on the way.
In the UK the Financial Ombudsman dealt with 100,000 PPI complaints in 2011 – upholding about 75% in favour of the customers. The UK ombudsman is currently receiving about 5,000 PPI complaints a week and over £3 Billion pounds has been paid out in PPI refunds and compensation in the UK since the start of 2011.