€67m payout for customers after ‘sharp practices’ by lenders
BANKS have been allowed to trample on the rights of consumers, a damning new report finds.
Householders have been sold out in a desperate bid to save the broken banks, a major academic study by the Free Legal Advice Centre (FLAC) has concluded.
It comes as thousands of consumers have clawed back €67m in refunds from banks and other lenders in a rare example of ordinary people getting some redress after six years of painful financial upheaval.
A total of 77,000 people were found to have been mis-sold an insurance product by lenders pursuing profits and breaching consumer protection rules in the process.
The FLAC study found that banks have been allowed to engage in sharp practices, in a desperate bid to save the financial system.
There is a massive imbalance in power between financial firms and consumers despite one of the biggest financial collapses in the world, and the €64bn bailout of the banks, the study finds.
the rigorous implementation of tough new rules promised by the Central Bank following the financial collapse, the report says.
The 218-page report, titled ‘Redressing the Imbalance’, makes 43 comprehensive recommendations for altering the balance of power between finance firms and consumers.
The new report comes as thousands of consumers have shared in a €67m clawback after they were mis-sold a controversial insurance product.
Average payments of €870 have been made to 77,000 people who bought payment protection insurance. The payouts follow a review ordered by the Central Bank into the selling of the insurance.
Some payments have been as high as €2,000.
Eleven banks and finance firms have been ordered by the Central Bank to refund customers who should never have been sold the insurance.
The Central Bank said the €67.4m repaid to consumers after the completion of a review includes almost €5m paid in interest to make up for consumers paying for policies they should not have been given.
A total of 353,800 payment protection policies were probed in the 11 banks, lenders and credit card providers. But the investigation could only go back to policies sold after July 2007, due to legal restraints.
The Central Bank found that 22pc of payment protection insurance was mis-sold.