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.

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.

When it comes to making the banks pay, no one has truly made any effective inroads. Sure all the PPI compensation claims and bank charges refunds have hit them hard, but it’s just a drop in the ocean. The Financial Services Authority (FSA) haven’t done much to protect the consumer and by letting the banks regulate themselves, we’ve ended up with a duff economy.

But, we must all fight for a fair deal and the Financial Services Compensation Scheme (FSCS) has made the latest move, saying that financial advisers must pay an £80 million interim levy to help pay back mis-sold customers. The £80m is part of the general levy against financial product providers for 2010/11, which amounts to £148 million.

For those who care: at the height of PPI, the banks were making around £148million every 14 days from policy sales, so it’s doubtful whether the FSCS levy is going to trouble them much.

If you bank with HSBC in Switzerland, you might want to ring you relationship manager and check all’s well because it emerged this week that personal details of an estimated 24,000 clients of HSBC Private Bank in Switzerland have been stolen. According to an FSA investigation, the data theft occured three years ago but HSBC only learnt about the incident in December 2008.

The bank reacted by spending over £60million on improving the security systems but by then, what the FSA calls “large amounts of unencrypted customer details” had been taken from the systems and posted to third parties. HSBC has said the stolen data is “highly likely” to include information about British customers.

Believe it or not, there’s a financial time bomb ticking away in UK, and if it goes off: hundreds of thousands of individuals stand to lose everything because of the culmination of a number of factors. We’re talking about attempts to stay afloat and keep the wolf from the door but these attempts could well bring the wolf in, sit him down and offer him afternoon tea. Have a read of this to find out more…

Bit of a stat-tastic post today all about lending in January 2010 and the whole of 2009, courtesy of recently released figures from the Bank of England. Check these beauties out:

- 48,198 mortgages were approved in January ‘10, – 17% lower than the 58,223 in December ‘09 but a whopping 43% higher than in January ‘09.

For a bit of context, researchers Global Insight believe 70,000 to 80,000 home loan approvals a month means ’stable house prices’ and experts attributed slow Jan ‘10 sales to poor weather (yes you read right) and the return of the Government stamp duty threshold to £125,000.

- **RECORD BREAKER** – UK banks wrote off a previously unheard of £4.12billion in bad credit card debt in 2009.

- £984million of mortgages were written off in 2009, double the £408million in 2008.

- In total the amount written off by banks (including cards, mortgages and other loans) rose from £6.9billion to £9.3billion.

- Total lending dropped from £13.53 billion in December to £10.24 billion in January.

- UK citizens borrowed £500million more than they repaid in January, a rare occurance with the populus having repaid more that we’d borrowed for five of the previous six months. An interesting comparison is that at £500million borrowed, the amount of credit being handed out in one month is still a long way from the £2billion a month during the peak of the recent boom time.

Whoopy!! The latest figures from the Office for National Statistics (ONS) show a halt in the rise of unemployment and early calculations show the recession is over after the economy grew in the 4th quarter of ‘09. This is yet to be confirmed and a more in-depth assessment will release figures this month and next to solidify the economic growth.

Despite this good news, more and more people are cancelling all non-essentials to try and prepare in case they lose their job. Top of the list of money-saving cuts are insurance products, in particular payment protection insurance (PPI). No doubt the countless PPI compensation claims has contributed to the cancelling of policies but those who do axe correctly sold cover are leaving themselves wide-open to greater problems.

Last year, the Financial Services Authority (FSA) whacked a massive fine on mortgage lending company GMAC-RFC for starting repossession proceedings too early. Now, GMAC-RFC conducts no new business in the UK and as well as the £2.8 million slap on the wrist, the US based lender had to repay £7.7 million to the customers concerned.

The thing is, what GMAC-RFC did is just as bad as all the extortionate bank and credit card charges that other lenders charged leaving people overdraen and in serious debt. Yet those lenders go unpunished and have their actions sanctioned by a Supreme Court. As usual in this odd financial system we have, it’s one rule for one set of customers and another rule for another. Get it sorted, someone.