OREANDA-NEWS. August 19, 2015. The Central Bank confirms that it has been engaging with AIB regarding the establishment of a voluntary redress scheme for consumers who purchased card protection insurance from Pinnacle Insurance plc (Cardif Pinnacle) through AIB.

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.  

Impacted customers will be contacted shortly by AIB, provided with an explanation of the issue and details of how to claim.

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.”

If consumers do not receive a letter from AIB by 30 September, but think they have been affected, they should contact the firm directly. Further details of how to claim under AIB’s voluntary redress scheme, including contact details, can be found on its website:  www.aib.ie/cardprotectionreview

Notes for editors

The Cardif Pinnacle card protection insurance product was offered to customers as an optional insurance within the credit card application process.  The product insured customers for, among other things, liability to a card issuer as a direct result of unauthorised or fraudulent card transactions. This element of the insurance cover was for up to €1,500 prior to reporting card loss or theft and for up to €75,000 after reporting the loss. However, customers were already indemnified by their bank under their card terms and conditions.

It is therefore evident that the potential liability may have been overstated in advertising and/or printed materials and that this may have influenced customers to purchase this product.

Cardif Pinnacle card protection insurance also provided limited cover for other losses suffered. This mainly relates to certain losses suffered while travelling outside the policyholder’s permanent country of residence e.g. for up to €200 personal money lost or stolen, up to €100 to pay to obtain temporary travel documentation, up to €100 to locate emergency medical assistance, an emergency cash advance to pay for replacement travel tickets, hotel accommodation or transport charges necessary to complete a journey etc.

This work is part of the Central Bank’s ongoing programme of supervisory engagement with firms to ensure that firms are delivering the right outcomes for consumers. This voluntary redress scheme follows on from the voluntary redress scheme, put in place at the request of the Central Bank of Ireland, for consumers who purchased card protection insurance provided by Homecare Insurance Ltd and purchased through Bank of Ireland, MBNA and Ulster Bank. In respect of that scheme, the estimated redress, based on claims to date, is just over €9 million.