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| 65,000 customers were affected by the error, at a cost of €15 million. |
Bank of Ireland has identified an issue relating to inconsistencies in the application of the Bank's refund procedures regarding unused premiums in
Payment Protection Insurance (PPI) policies.
The inconsistency has arisen in some cases where customers who purchased Payment Protection Insurance when taking out a loan have not been refunded the unused portion of the premium when they paid off their loan ahead of the agreed repayment period. In such circumstances the Bank has a policy of refunding customers any unused portion of their PPI premium.
This issue was identified by Bank of Ireland during the course of an industry wide review of this product requested by the Irish Financial Services Regulatory Authority (IFSRA). The regulator has been fully informed of the matter.
The bank has begun an immediate investigation to establish the full extent of the issue and to initiate communications and refunds to the customers affected. The full extent cannot be confirmed until the completion of this investigation. Initial estimates indicate that the number of customers affected is in the region of 65,000. The bulk of these relate to policies issued in recent years although the product was introduced in 1989.
Potential refunds due, including interest, could be up to €15 million.
Bank of Ireland issued approximately 1.5 million personal loans since the PPI product was introduced. About 470,000 PPI policies were issued in relation to these loans. Of the associated loans 170,000 were repaid early of which 65,000 were affected by this error.
Bank of Ireland regrets that its procedures were not implemented consistently in all cases in relation to this product. Given the Bank's commitment to the highest standards of customer service such a lapse is clearly unacceptable. The Bank will ensure that all customers affected will be refunded the outstanding portion of their premium together with interest on the refunded amount.
The Bank's records will ensure that all affected customers will be communicated with and refunded. The process of refunding customers will begin in May and is expected to take a number of months. If customers have queries in relation to this issue they should contact their local Bank of
Ireland branch or a special helpline that has been set up to handle queries in relation to this matter ? 1800 882 828.
