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

Lloyds had the most complaints as grievances rose to 860,

Finance firms attracted nearly 20,000 complaints a day in the first six months of 2012, it was revealed yesterday, as the backlash against UK banks continues.

The payment protection insurance mis-selling scandal accounted for the bulk of the 3.6 million grievances, according to the Financial Services Authority. PPI complaints soared 129 per cent in the period to 2.23 million, while the total number of complaints climbed 59 per cent. The bill to compensate customers of banks who were flogged the useless payment cover is expected to eventually top £10bn.

After the figures were published by the City watchdog, Consumer group Which? warned that the compensation bill could climb higher still, and called on banks to set aside more funds.

Its analysis suggests that if PPI payouts continue at the same pace as the first half of 2012, Lloyds could run out of provisions by November, Barclays by December, RBS within the next six months and HSBC by August next year.

Peter Vicary-Smith, Which? chief executive, 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 as grievances climbed 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 banking giant.

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

NatWest, credit card company MBNA and 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 per cent were upheld, well below the average.

Santander received the most complaints about banking issues with 157,165. It blamed new fraud protection measures introduced in January. "This resulted in some instances of customers contacting us because they were unhappy about the additional measures put in place to protect their accounts," it said.

At Lloyds, the customer services director, Martin Dodd, said: "We understand that there's still work to do, but the figures show that relative to the number of customers, we have fewer complaints than any other bank."

He said Lloyds had 1.4 complaints per 1,000 accounts, compared with 5.2 at Santander.

In contrast, Nationwide Building Society, with 17,269 complaints about banking services, had just 0.7 complaints per 1,000 customers.