Banking giant Lloyds has confirmed it will no longer sell the controversial payment protection insurance (PPI).
Lloyds Banking Group, which is 41% owned by the taxpayer, is the first bank to drop PPI sales and the decision will apply to customers of all its brands including the Halifax, Bank of Scotland and the Cheltenham & Gloucester.
Under a PPI policy, an agreed sum of money is paid out each month to fully cover, or cover a percentage of the payment due on your mortgage or loan if you are unable to work, as a result of becoming unemployed or sick.
However, the Competition Commission is pressing ahead with its proposal to ban the sale of PPI after it was found that millions of PPI policies were mis-sold.
In September 2009, City Watchdog the Financial Services Authority (FSA), proposed a major overhaul of the rules.
In the last year almost one third of all new complaints that were submitted to the Financial Ombudsman Service (FOS) were about PPI.
Commenting on its decision, a spokesperson for Lloyds said: “If people are interested in taking the insurance we will offer them a British Bankers’ Association (BBA) leaflet about the insurance.”
The decision was welcomed by several consumer groups and Which? said it hopes other banks will follow suit.
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Tags: ban, Competition Commission, complaints, consumer groups, controversial, Lloyds Banking Group, payment protection insurance, PPI, sale, stop, welcome
