Some 110,000 credit card customers of AIB may be in line for a pay-out of up to €128 following the launch of a redress scheme by the Central Bank.
Customers who purchased card protection insurance from Pinnacle Insurance plc (Cardif Pinnacle) through AIB, betweenAugust 1st 2006 and 2014, typically at an annual premium cost of €16, may now be entitled to a refund. Someone who took out a policy in 2006 and held it until 2014 may be entitled to a refund of as much as €128 but the bank said the average claim will be €66. This means that the scheme could cost the bank as much as €7.2m, but take-up of such schemes is typically low.
The Central Bank said that the scheme is being put in place because an element of the card protection product (cover for unauthorised or fraudulent use) was not required, as customers were already covered for amounts greater than € 75 under the terms and conditions of their credit card.
The Central Bank's director of consumer protection, Bernard Sheridan, said: "We require all firms to make full disclosure to consumers of all relevant material information when selling any financial product. It is important that consumers can have confidence that firms are acting in their best interests and that they are not sold any cover which they do not need. Where this has occurred it is our priority to ensure that consumers receive full redress. We encourage all affected consumers to make a claim."
Customers of AIB affected by the sale of the product should expect to get a letter shortly from the bank. If they have not received one by September 30th, they can contact the bank directly. Six weeks
Full details on how to process a claim can be found here or you can contact the bank's helpline on 0818 227 058 available Monday to Friday between 9.00am and 5.00pm.
It's the second such scheme launched by the Central Bank. Earlier this year, some 160,000 credit card customers of Bank of Ireland, MBNA and Ulster Bank were entitled to a refund of between €100 and €200 after being mis-sold a similar policy from Homecare Insurance, a subsidiary of the CPP group. The deadline for compensation under this scheme has now passed in many cases. BOI for example asked customers to respond by July 24th in order to qualify for compensation.
However, according to the Central Bank, just 40 per cent of eligible claims for compensation were made, giving a total compensation of just €9m. This means that some €13.5m remains unclaimed.
A similar compensation scheme in the UK reported a response rate of just 33 per cent.