Towergate firm Paymentshield hits out

The decision by high street lenders Barclays and Lloyds TSB to challenge the ruling that prohibits selling payment protection insurance alongside a loan has been slammed as "counterproductive" by provider Paymentshield.

The Towergate owned business has accusef the banks of swimming against the moral tide and in doing so risking further alienating customers.

Head of marketing Sandy McPherson said: “I realise that banks are not immune to these tough economic times and everyone is looking to maximise their income. But surely it makes no sense to revert back to the target driven sales practices that actually got us in to this mess in the first place?

“The protection sector is struggling to regain consumer confidence following a barrage of criticism over the past couple of years. For these banks to come out at this time and declare they intend to seek redress through the courts of a decision that was widely welcomed is frankly counterproductive and risks doing serious long term damage, not only to the banking sector, but the wider financial services industry.”

The Competition Commission declared that the sale of PPI at the time a loan or credit is taken out should stop from October this year following evidence of widespread mis-selling.

At the same time it decided that the sale of single premium policies sold alongside mortgages or credit cards should end this month.