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After revealing last week that they are to stop selling Payment Protection Insurance (PPI) Lloyds this week revealed their results for the year so far and they made for good reading. The banking group reported better than expected first half profits, citing a reduction in losses from investments and payouts to shareholders, mainly due to the 41% Taxpayer stake taken by the Government.

Pre-tax profits over the first half of the calendar year totalled £1.6 billion, well above the forecast of £858 million and a vast improvement on the same period last year, when they reported a loss of £3.95 billion. The bank has seen a £14 billion increase in deposits since the end of last year and the lender’s income rose 5% to £12.5 billion, but given that it is still receiving £132 billion of Government support, the results shouldn’t be too loudly applauded.

After the PPI claim scandals and initially leaving out Retail PPI from the ban on selling payment protection insurance alongside financial products, the Competition Commission (CC) is now looking to clamp down on the methods by which retail PPI is sold. The CC has published plans to help consumers ascertain the true cost of retail PPI cover and their rights when purchasing it.

Retail PPI was originally excluded from the ban because of the small number of sales, it is typically sold alongside products bought through home catalogues and makes up just 2.5% of gross PPI sales. The proposals for change to retail PPI including making it compulsory for retailers to:

- Offer PPI separately from merchandise cover if both are offered as a bundled product
- Provide information about the cost of PPI and ‘key messages’ in marketing materials
- Provide a personal PPI quote to customers before the end of the cooling-off period
- Remind all active customers of their cancellation rights and of key messages on an annual basis
- Stop the sale of single-premium PPI policies and on charges which have a similar economic effect

Of course, this being a fair marketplace, the CC is to invite comments on its proposals from Companies and interested parties prior to deciding on final verdict on all PPI sales in September.

Just a quickie today, check out this article on the MSN network, it’s about the recession and reveals most and least affected locations in GB. Very interesting and goes to show that it’s an ill wind that blows no one any good, have a look…

Isn’t it good to hear that all your campaigning and hard work supporting the fight against the banks is having an effect? The lastest ‘good’ news is the reduction in overdraft fees on current accounts with Lloyds TSB. The lower charges will kick in from December when the partially Taxpayer-owned bank is to cut the daily and monthly fees for customers who go overdrawn without permission.

It will also halve to £10 the fee for a bounced cheque or e-payment, however the interest rate for an unauthorised overdraft remains at 19.3% and now customers in the red will incur a £5 a month charge as well. So, good and bad news really, they’ve given with one hand and taken away with the other, speaking about the changes, Lloyds TSB Director Mike Regnier said: “Our customers are telling us that they still think our unarranged overdraft fees are too high and we are responding to that very directly by cutting them.”

Unfortunately, the more you read about these cuts the worse it gets for Lloyds TSB customers as it has also decided to stop paying any interest on its standard current accounts. But it’s something and with the new coalition Government last month echoing Labour’s words to introduce unfair credit card charges and bank fees regulations if the banks don’t cut levies, lets hope more reductions are en-route.

Knowing whether to take out a Payment Protection Insuarance (PPI) policy has never been more tricky than it is in the current financial marketplace. Until a few years ago, it was a no-brainer, often included  anyway or pushed on customers, those who chose it had an easy decision to make as the lender often had a policy ready to sell.

Nowadays, the PPI industry has had a shake up, getting rid of mis sold PPI products and from July this year lenders will no longer be able to offer the insurance alongside a credit agreement. In addition to the damaged public opinion of the credit cover, people are also cancelling and turning down the insurance as a way to save money. Even considering all the mis-selling, whether borrowing without cover is a good idea; only time will tell.

Do you work in the Public Sector? If so, you’ll no doubt be watching the next few moves of the new Lib-Con leadership with intrepidation as they announce the harsh cut backs needed to reduce the deficit. Potentially thousands of nurses, teachers, policemen and other workers face the threat of unemployment as the Government try to support the recovery and save billions of pounds.

In essence, the jobs of some Public Sector workers may well be the sacrifices made for the rest of the UK population who work in the Private Sector. With this in mind, it’s a good time to see if you are owed money from mis sold PPI, but we would say that. It’s also time to consider switching or GETTING a PPI policy, and we don’t usually say that. Find a trusted provider, make sure they explain it to you and that you pay a fair price, this way, you could just protect your home, family and lifestyle from some Clegg-Cameron cuts.

If you’ve thought about making an unfair bank charges or mis sold PPI claim but not gotten round to it… pull your finger out. And if that hasn’t persuaded you, have a read of this letter from a Mortgage Strategy reader that shows lenders really don’t give a damn about their customers, take a look…

The Financial Services Authority (FSA) will be given new powers by the newly appointed secretary of state after the Financial Services Act received Royal Assent on 8th April. The Act won’t be exactly as proposed, with class action PPI claims and a few other elements being dropped to make sure it was passed into legislation before Parliament disolved for the general election.

The class action proposals would have enabled multiple consumers to join together and bring a case against banks, insurers and other financial institutions. The new Act will give the FSA some useful powers when dealing with PPI claim cases and under section 14, it will be able to draw up rules for a consumer redress scheme. This scheme will look to compensate consumers that have been affected by a ‘widespread or regular failure’ by relevant financial services firms. If a firm fails to comply with the regulator’s requirements and consumers have suffered (or might suffer) loss or damage as a result, then the FSA can implement punishments. Whether the regulator will stand up for the consumer and use it’s new powers, remains to be seen.

It was only a matter of time before we started to see payment protection insurance being used as a political football and Gordon Brown kicked off today with a pledge to clampdown on banking rip-offs and mis selling. Of course Brown is referencing the completely unfair bank charges and mis sold PPI policies that have been uncovered in the banking industry over the last 4 years.

Labour has said it wants fairer charges but the Lib Dems have gone one step further and are campaigning for victims of past fees to be refunded despite the Court decision in November. Whether the Tories will chip in is to be revealed tomorrow, when they announce their manifesto.

Borrowing money has never been more expensive, according to research done by Moneysupermarket. They’ve uncovered a 130% rise in small loan interest rates over the last 4 years, taking the average interest rate of a £3000 loan from 6.49% up to 14.92%. In fact all loans under £5000 have risen sharply in cost while larger loans have remained competitive, the reason for the hikes has been in part attributed to mis sold PPI and the FSA ban on PPI sales alongside loans.

Head of loans and debt at Moneysupermarket, Tim Moss, said: “Following the Financial Services Authority’s decision last year to ban providers from selling single premium payment protection insurance on unsecured loans we knew the lenders would seek other ways of clawing back their profit.”