Credit card providers have increased their rates to the highest level in 13 years in an attempt to recoup expected losses from the mis-selling of payment protection insurance (PPI).

PPI policies are meant to repay people’s loans if their income drops due to unemployment or illness. But many people were unaware that they were paying for the insurance or they did not need it - and some, such as the self-employed, signed up to the policies even though they were ineligible to claim.

Last month, the High Court dismissed attempts by Britain’s banks to overturn new rules on the sale of PPI.

The new rules, from the City Watchdog the Financial Services Authority, require insurers to review past sales of PPI, even where customers had not complained.

It means banks may be forced to pay compensation to millions of customers who took out the controversial insurance.

The latest research suggests banks are now increasing their charges to help offset the compensation they expect to pay.......Read more HERE