Lloyds Banking Group has stopped selling PPI across all five of its brands, effective this week.
Since 23 July, Lloyds Banking Group has stopped selling payment protection insurance through all of its brands, which include Lloyds TSB, Halifax, Bank of Scotland, Cheltenham & Gloucester, and Black Horse.
There has been much controversy surrounding PPI, with instances of where it was mis-sold, whereby customers were pressured into taking out insurance they did not need, or which was unsuitable for them, without being offered the opportunity to shop around and compare other products.
These cases cumulated in an investigation by the Financial Services Industry, which resulted in the Competition Commission ruling that point-of-sale PPI would be banned, so no lender could sell it to customers within seven days of them taking out the loan, mortgage, or credit card.
Sales of PPI – which is designed to cover payments if the customer is unable to work – have reportedly been worth £5billion a year, so the Competition Commission's ruling has been met with resistance by the insurance industry, making Lloyds Banking Group's decision a surprise.
Existing Lloyds customers who have taken out PPI policies will be unaffected, PPI applications on loans and credit cards will be honoured until 31 July, and on mortgages until 20 November, but it is no longer accepting new applications.
Martin Lewis, creator of 'consumer revenge' website MoneySavingExpert.com said that while "The product itself isn't bad" because "it can provide useful protection to people if they're sick or lose their jobs," he welcomes the move, because it has "been scandalously mis-sold for years leaving many consumers in misery." He hopes that this will encourage the other big banks follow suit.
Peter Vicary-Smith chief executive of consumer watchdog Which?, agrees. He said: "Lloyds' decision to stop selling PPI is a huge victory for consumers. Hopefully other banks will follow suit and we'll finally see the back of this poor protection product.
"Now it's the beginning of the end for PPI, banks need to get back to the drawing board and offer their customers insurance products that actually protect them when they need it."
© Fair Investment Company Ltd
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