Lloyds stops selling PPI

Lloyds Banking Group (including Halifax) has stopped selling Payment Protection Insurance on all its loans, credit cards and mortgages. Instead it will hand out a generic leaflet about PPI.

The Competition Commission is about to publish its final report into the selling of PPI. It will decide whether to uphold its provisional proposal to ban selling PPI at point-of-sale.

Lloyds, along with Barclays appealed against the ban. The move to stop selling PPI before the CC announcement indicates Lloyds knows the appeal has been lost.

Martin Lewis, creator of MoneySavingExpert.com, said the move was “quite astonishing”.

He said: “This insurance, which has been scandalously mis-sold for years leaving many consumers in misery, is estimated to be worth up to five billion pounds a year for the industry.

"Frankly we're jumping for joy at this news, and hope the other big banks follow suit. The product itself isn't bad, it can provide useful protection to people if they're sick or lose their jobs as it covers their repayments, but people should go to competitive standalone insurers rather than banks. That's because they sell it at four or five times over the odds, often without checking suitability, meaning many have been duped into paying a hidden £1,000+ extra on policies that are worthless for them.”

Which? chief executive, Peter Vicary-Smith 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.”