Lloyds ends sale of PPI.

The Lloyds Banking Group has announced it will no longer sell Payment Protection Insurance (PPI) on all of its loans, credit cards and mortgage deals.

A spokeswoman for Lloyds said ending the sale of PPI is due to increased regulation on this type of insurance.

PPI has been the subject of long running criticism due to the way it has been sold. The sale of PPI policies are now being restricted by the Financial Services Authority (FSA) and the Competition Commission.

Lloyds is the first bank in the UK to make the decision to stop selling PPI policies. The Lloyds group has said this decision will extend to all of its brands including Halifax, Bank of Scotland and Cheltenham & Gloucester.

Instead of selling PPI cover, if customers are interested in taking out an insurance policy, Lloyds will offer them a British Bankers Association (BBA) advisory leaflet.

Martin Lewis from consumer website moneysavingexpert.com was among those happy about the decision, he had to say:

“This insurance, which has been scandalously mis-sold for years leaving many consumers in misery, is estimated to be worth up to £5bn a year for the industry

It can provide useful protection to people if they are 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 echoed his views. “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” he said.

Experts predict Lloyds decision to stop selling PPI will cause many more High Street banks to follow suit.

Lloyds has said existing customers who have taken out policies or those in the process of doing so, will not be affected.

Have you been mis-sold PPI? We can think smarter and claim back your mis-sold PPI payments. Apply online to find out more, you could be owed thousands of pounds.

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