The Central Bank has ordered seven financial institutions to carry out comprehensive reviews of their sales of payment protection insurance (PPI) over the last five years amid growing concerns that thousands of consumers were mis-sold such products.

The Central Bank is conducting an ongoing investigation of PPI sales and today it released the findings of its latest inspection in which it expressed concerns about how such policies were sold.

About 340,000 PPIs were sold during the period August 2007 and November 2011, with more than 80 per cent of them being sold through banks and credit institutions, including credit card companies.

The Central Bank’s director of consumer protection, Bernard Sheridan said today the reviews will have to be overseen by an independent third party.

“In advance, we are requiring these firms to submit detailed plans for how they will conduct their review, including contacting affected consumers and making refunds where necessary. We will carefully assess their plans and put in place monitoring arrangements to ensure that all firms take a fair and consistent approach to their review,” he said.

Mr Sheridan said the Central Bank was also considering possible enforcement actions “due to our concerns regarding the level of compliance” with the requirements of a code governing the sale of PPI. He said the Central Bank would be contacting the firms involved directly in due course.

The Central Bank is concerned some firms have not been gathering sufficient information to enable them to determine whether products sold are suitable for consumers and it has highlighted a failure to bring key information on policies explicitly to the attention of individual consumers.

It has also found evidence of poor record-keeping and incomplete files.