The bill for mis-sold payment protection insurance (PPI) at Barclays soared to £2 billion today as claims against the banking giant continue to pile up.
The embattled lender unveiled a further £700 million hit following provisions of £1 billion in 2011 and £300 million in the first quarter of 2012.
The higher charge comes after the Financial Ombudsman Service warned that PPI complaints are on course to more than double the 165,000 that it had anticipated this year.
The majority of Britain's banks unveiled larger PPI provisions during the half-year results season - but Barclays did not reveal a further charge.
Lloyds Banking Group has racked up a PPI compensation bill of £4.3 billion, HSBC has booked £1.7 billion and Royal Bank of Scotland £1.3 billion.
Barclays said it currently expects adjusted pre-tax profits, which exclude the impact of own credit and the PPI provision, for the three months to September 30 to be in line with market expectations at £1.7 billion.
The higher PPI charge comes as Barclays fights to restore its reputation in the wake of a series of scandals, including the Libor-fixing affair and the mis-selling of interest rate swap arrangements.
Around £10 billion has been set aside by the banks to cover claims being made by people who were sold insurance they did not want or need, but some consumer groups have raised concerns that even this could not be enough to cover the scale of the problem.
PPI policies were meant to help people pay back their loans after a loss of income, but a widespread mis-selling scandal emerged, with some people finding they had taken out the insurance without realising it or felt under pressure to do so.
The Financial Ombudsman Service (FOS) said earlier this month that it has already received nearly 100,000 PPI complaints in the first six months of this financial year.
The flood of complaints dramatically increased from 32,445 complaints made in the first quarter to 66,882 between July and September, the FOS said.
With 1,500 new complaints a day and well over 3,000 new telephone inquiries a day, the FOS warned it was "likely" that the total number would be more than double the 165,000 cases predicted.
The FOS previously criticised banks and insurers for subjecting customers to "delays and inconvenience", despite a legal challenge to PPI complaints being dropped last year.
Some 68% of these complaints were upheld by the ombudsman service in consumers' favour between July and September, a similar level to the 69% upheld between April and June.
The average compensation payout is £2,750, although the figure can vary considerably.
The ombudsman service has received a total of 450,000 complaints from customers about PPI since 2001.