Lloyds Banking Group bins PPI

Lloyds Banking Group has stopped selling payment protection insurance (PPI) after declaring the product no longer "economical" for the business.

The group stopped selling the controversial product on loans, credit cards and mortgages on 23 July, although it will continue to service in-force policies.

Lloyds confirmed the move following reports on consumer site MoneySavingExpert.com.

The company lent its support to a legal challenge by Barclays in 2009 after the Competition Commission proposed a point-of-sale ban on PPI alongside other credit products.

Barclays and Lloyds challenged the ruling on the grounds the Commission's investigation lacked enough evidence of mis-selling.

A spokesperson for the bank says: "Lloyds decided it was no longer economical to offer the [PPI] products."

Which? CEO Peter Vicary-Smith says: "Lloyds' decision to stop selling PPI is a huge victory for consumers. Hopefully other banks will follow suit and we'll finally see the back of this poor protection product.

"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."