PPI complaints soar to 2.2 million

Payment protection insurance (PPI) complaints to financial services firms more than doubled in the first half of this year to reach a new high of over 2.2 million, the City watchdog said.

The huge surge in PPI complaints compared with the last six months of 2011 drove a 59% increase in the total number of complaints to firms to 3,577,599, the Financial Services Authority (FSA) said.

There were 2.23 million complaints about PPI in the first half of 2012, the highest six-monthly figure the FSA has ever recorded and complaints against it soared by 129% compared with the second half of 2011, when just under 977,000 complaints were reported.

Around £10 billion has been set aside by banks to cover claims being made by people who were sold insurance they did not want or need, in what is predicted to become the biggest consumer financial scandal of all time.

In terms of total numbers of complaints opened about all products, including PPI and other financial services, Barclays, Lloyds TSB and Bank of Scotland attracted the largest numbers of complaints opened in the first half of 2012.

Barclays attracted the largest number of new complaints, with 442,266, a 57% increase compared with the previous six months, with Lloyds TSB and Bank of Scotland coming in second and third place respectively.

The FSA figures for all the financial firms showed that PPI complaints figures far outweighed complaints in other categories, with banking complaints rising 5% to reach 828,040, driven by a rise in complaints about savings, credit cards and loans, while complaints about current accounts fell 13% to 323,955.

Complaints about investments saw a 6% rise to reach 43,460, complaints about home finance saw a 19% increase compared with the previous six months, and in home finance, complaints about equity release products almost doubled on the previous six months to reach 1,053.

Consumer group Which? urged financial firms to make sure they put enough cash aside to deal with the rocketing numbers of PPI complaints, of which around two-thirds are upheld, according to the FSA's figures, adding that bonuses received by senior executives who presided over PPI mis-selling should be clawed back to boost compensation funds.

Barclays said that if PPI complaints were stripped out of its figures, overall complaints would have fallen by 9% year-on-year, adding that it is improving its customer services, which will help cut future complaints numbers.