The Lloyds Bank group, including Lloyds and TSB, has stopped selling new payment protection insurance that it used to sell with mortgages, loans and credit cards.
The bank had supported a legal challenge by Barclays in 2009 after the Competition Commission proposed a point-of-sale ban on this type of product alongside other credit products. Barclays and Lloyds challenged the ruling on the grounds the Commission's investigation lacked enough evidence of mis-selling.
Banks have made millions each year in commission from these policies.
The bank only admitted the change after a consumer finance site revealed it. The bank offers a less than convincing excuse that it is no longer economical to offer the products.
Which? s Peter Vicary-Smith says: "Lloyds' decision to stop selling PPI is a huge victory for consumers. Hopefully other banks will follow suit and we will finally see the back of this poor protection product. Now it is 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.”
Income protection insurance: News update: 29 July 2010