/ Money

Hooray for Lloyds’ PPI u-turn

U-turn sign

Today’s news that Lloyds won’t be selling payment protection insurance (PPI) anymore is a huge step forward in our campaign, but why ditch it now?

Which? and PPI go back a long way. We first raised issues with the market over 10 years ago. Since then we’ve campaigned for a number of years for adequate, appropriate and good value protection products that will benefit consumers.

So, of course we’re made-up about Lloyds’ announcement. We know from our own research that up to two million people may have been sold a PPI policy they will never be able to make a claim on. Plus, the Competition Commission revealed a few years ago that customers appear to be overcharged by over £1.4 billion a year.

PPI = poor value for money

These facts alone suggest PPI is a product that offers extremely poor value for consumers at a time when they are most feeling the pinch and need decent protection products. Banks ditching PPI means many people will be saved from being mis-sold a product they’ll never be able to make a claim on.

And yet, it’s hard not to wonder what Lloyds’ motives are when they’ve done a complete u-turn.

Last year, the Competition Commission decided to ban PPI from being sold at the same point as the credit product, such as a credit card or loan. Barclays appealed the decision and then Lloyds waded in to support them. Now, little more than a year later, they’re changing their minds. Why vociferously defend a product that you then proceed to stop selling the following year?

Whatever the motivation, we’re hoping this is a small victory that will become part of a much bigger movement towards the end of PPI and the introduction of better, value for money protection.

Have you been mis-sold PPI?

  • Claiming back PPI is a quick and easy process, so there’s no need to go through a claims handler, who will charge for their service.
  • If you want to claim back your PPI, use our PPI claim tool – a simple process to help you get your money back.
  • If you don’t get the result you’re after, don’t accept a brush-off from your bank. Take your complaint to the Financial Ombudsman Service, which is free. Persistence pays off – almost 90% of complaints taken to the FOS are upheld in favour of the consumer.
Phil says:
29 July 2010

It’s really worthwhile claiming back if you have PPI – lots of people get their money back. Great news that Lloyds have given up with this, but what took them so long..?

Good news indeed whatever the motives! Customers who think they’ve been missold should still put in a claim, even if their provider doesn’t sell PPI any more. New stats from the Financial Ombudsman Service show that 81% of PPI complaints to FOS in April, May and June were upheld in favour of the consumer. And that’s just the tip of the iceberg.

It’s also worth adding that you may have been missold PPI without even realising it’s PPI you were buying. Just calling it ‘Lifestyle protection’ or ‘loan repayment protection’ doesn’t mean it’s not PPI – if you think you’ve been missold, put in a claim!