Insurance scandal leads to 20,000 complaints a day to Britain's banks

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The Independent Online

Financial companies received nearly 20,000 complaints a day in the first six months of 2012 as the backlash against UK banks continued, it emerged yesterday.

The mis-selling of payment protection insurance accounted for the bulk of the 3.6 million grievances, according to the Financial Services Authority. Complaints about PPI soared 129 per cent over the period to 2.23 million, while the total number of complaints climbed by 59 per cent.

The bill to compensate bank customers who were sold useless payment cover is expected to eventually top £10bn. After the figures were published by the City watchdog, the consumer group Which? warned that the compensation bill could climb higher still, and called on banks to set aside more funds.

Analysis by Which? suggests that if PPI payouts continue at the same pace as they did in the first half of this year, Lloyds could run out of provisions by November, Barclays by December, RBS within six months and HSBC by August next year.

The Which? chief executive Peter Vicary-Smith, pictured, said: "PPI is now the biggest financial scandal of all time. The banks must set aside more money for PPI claims and make it easier for customers to get back what they are rightly owed, without any hassle."

Lloyds Banking Group remains the most-complained-about financial group. Grievances about the company climbed by 146 per cent to 860,000 between January and June. But those complaints were spread across the many different brands of the partly state-owned bank.

Barclays attracted the most individual complaints with 442,266.Lloyds TSB was second with 431,708 and Lloyds-owned Bank of Scotland was third with 362,869.

NatWest, the credit card company MBNA and the Spanish-owned Santander received between 240,000 and 296,000 complaints each.

Complaints about banking services rose 5 per cent to 828,040, although only 47 5 per cent were upheld, which was well below the average figure.

Santander received the most complaints – 157,165 – about banking issues. It blamed new fraud protection measures introduced in January.