PPI sales ended by Lloyds TSB

Payment Protection Insurance, also known as PPI, has been at the centre of controversy for several years, after investigations revealed that these policies were often being mis-sold to a variety of people that would not and could not benefit from them. This resulted in a major investigation and with new regulations being brought in by authorities with regards to the sale of these policies.

PPI is designed to protect those that take out finance such as loans and credit cards, and are designed to cover repayments for a specified period of time in the event that the policyholder cannot make repayments due to sickness, injury, or redundancy. However, many consumers were being sold these policies by financial institutions when they were not even eligible to claim, such as self employed people.

One banking giant, Lloyds TSB, has now thrown down the gauntlet by revealing that it will no longer be selling PPI alongside its financial products, and this is something that more and more lenders are likely to do given the new regulations and the controversy surrounding this type of insurance cover.

Lloyds will now only be offering interested customers leaflets on PPI produced by the British Banker’s Association, giving the consumer the chance to make their own minds up about the cover, choose cover from a provider of their choice, and spend more time thinking about whether they want or can afford the cover, which can be costly. Officials believe that this step by Lloyds could be the start of PPI sales disappearing from High Street lenders, as other banks take similar measures.

Which? chief executive, Peter Vicary-Smith called Lloyds’ decision a ‘huge victory for consumers’ He said: ‘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.’