Advertisement:
Category: Insurance Date: 7/27/2010
Lloyds Banking Group has decided to stop selling the controversial Payment Protection Insurance (PPI) on all its loans, credit cards and mortgage deals.
Instead, the part-nationalised lender said it will simply provide borrowers with a generic leaflet regarding the product.
The move is the latest development in the long running PPI saga.
PPI covers repayments on credit products if the borrower is unable to pay off loans due to accident, sickness, unemployment or death. However, accusations that lenders have mis-sold PPI have long dogged the industry.
Indeed, in a report published last year, the Competition Commission found that the vast majority of PPI policies are sold at the same time as a consumer takes out a loan, credit card or some other type of credit. Many consumers were said to be unaware that they could purchase PPI from other providers, and rarely did consumers compare price and terms of conditions of PPI.
As a result, the selling of PPI at the same time as the credit card, loan or mortgage was taken out was banned earlier this year, with providers having to wait at least seven days before offering cover.
It now appears that Lloyds Banking Group has decided to go one step further.
"Lloyds decision to stop selling PPI is a huge victory for consumers," said Which? chief executive, Peter Vicary-Smith. "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."
Why not check out our selection of the leading Income Protection offers currently available
