PPI commitment welcomed by consumer group

21/01/2009

Five major UK financial firms have pledged to stop selling single premium Payment Protection Insurance (PPI).

The Financial Services Authority (FSA) announced yesterday that Alliance and Leicester, Barclays, the Co-operative Bank, Lloyds banking Group (including Lloyds TSB, Halifax and Bank of Scotland) and RBS/Natwest have all made the decision.

PPI, a type of loans insurance designed to cover repayments for policyholders who suffer a sudden loss of income such as through redundancy, has proved controversial with consumer groups recently.

Providers have been criticised for mis-selling the cover to people who cannot hope to make a successful claim on the insurance if they need it.

Welcoming the move, Citizens Advice debt policy officer Peter Tutton said: "These premiums are very expensive and can add substantially to the cost of a loan, often increasing people's debts instead of protecting them against hard times.

"However we still have concerns about the high price and poor quality of many PPI products and there is still a long way to go in tackling these problems."

Tags; Debt Management and Banking, Credit Card Lifestyle,

Regional Debt Advice; Debt Advice Leicester,

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