AIB mis-charging costs 3.1 million Euros in pay-outs
May 1, 2012 at 11:09 am
In the midst of the Payment Protection Insurance (PPI) scandal, Allied Irish Bank has confirmed that it will be refunding €3.1 million to around 11,500 customers for the mis-sale of insurance products – an average of €270 per customer.
After recently being fined €2 million by The Central Bank, state-owned Allied Irish Bank has now been ordered by The Financial Services Authority to write to every customer that may have been affected by this blunder. The letter sent by Allied Irish Bank vaguely stated that there had been ‘inconsistencies’ in the sale of insurance and a guide to claiming the money back. When confronted over the alleged ‘inconsistencies’ by a BBC correspondent, Allied Irish Bank refused to divulge any more information.
Allied Irish Bank has, however, informed the public that the errors were found during a review of credit card accounts and relate to Payment Protection Plans, travel insurance and card protection. It is thought that the inaccuracies stem from issues in the bank’s internal verification systems and failures to validate customer information correctly in cases of contradictory information on application forms. It is said that alterations are being made internally to these systems to prevent an episode like this from occurring in the future.
In terms of the refunds, Allied Irish Bank has said that the review programme was carried out according to pre-determined procedures relating to customer refunds. In any cases of doubt, the benefit has been given in the customers’ favour as an overarching gesture of the bank’s apology. The Central Bank has been made aware of this issue and is now launching an investigation.
