Payment Protection Insurance (PPI) gripes boosted the number of complaints made to the Financial Ombudsman Service (FOS) in the first half of 2011 by a massive 54%, compared to the amount of cases in the second half of 2010.

During the six months from 1 January to 30 June 2011, the FOS received a total of 149,925 new complaints, an increase of 54% on the 97,237 cases received in the second half of 2010.

The increase comes following a surge in complaints about the mis-selling of PPI, with a massive 98,632 cases relating to this, 66% of the total.

The data, which was published today, covers consumer complaints about banks, insurance companies and investment firms, which the consumer has taken to the ombudsman following an unsatisfactory response or rejection from the firm involved.

Key Points

  • 54% MORE complaints to FOS than in second half of 2010
  • Rise due to 1,000s of PPI complaints previously put on hold
  • Lloyds TSB received the most new complaints

The FOS says the rise in complaints is down to the fact that during most of the period, four of the main high street banks put complaints about PPI mis-selling on hold, pending the outcome of a judicial review on the issue.

But the result went against the banks in April and they were ordered to clear the backlog of complaints by the end of August, either by paying compensation or rejecting a complaint.

Yet overall, the number of cases upheld by the ombudsman in favour of consumers has fallen slightly to 47%, from 53% in the second half of 2010.

The FOS says the decrease in the uphold rate reflects the delay caused by cases being put on hold until the legal challenge ended in April.

Events that followed the verdict - banks having to resolve complaints by the end of August, and more awareness of the ombudsman route for redress - could see the uphold rate rise for the second half of 2011.

Lloyds TSB has the most complaints upheld

Of the major high street banks Lloyds TSB also had the most complaints against it upheld by the FOS, 63% compared to the overall average 47%. Just behind, both Santander and Halifax and the Bank of Scotland (HBOS) had 44% of complaints against them upheld in the consumers' favour.

HSBC scored best of the major banks as the Ombudsman upheld just 20% of cases against it.

The most complaints across all categories were about Lloyds TSB, which mirrors the second half of last year. There were 19,569 new complaints brought against Lloyds TSB in total, 16,965 of which related to PPI.

Worse still for Lloyds's parent company Lloyds Banking Group, its other major banking arm, HBOS, was third in the league of new complaints, attracting 13,021 (9,945 relating to PPI).

Barclays was the second with 16,864 new complaints (12,862 on PPI), HSBC came fourth with 10,072 (8,791 on PPI), followed by Santander with 6,434 (1,659 on PPI).

FOS complaints data for the big banks

  PPI Complaints Upheld Overall Complaints Upheld
MBNA 8,551 89% 12,500 87%
Black Horse 3,533 82% 3,721 79%
Lloyds TSB 16,965 84% 19,569 63%
RBS 5,225 55% 5,863 45%
Santander 1,659 52% 6,434 44%
HBOS 9,945 47% 13,021 44%
Barclays 12,862 52% 16,864 43%
Natwest 4,234 54% 5,628 38%
HSBC 8,791 18% 10,072 20%
Capital One 6,752 13% 7,160 14%
Nationwide 1,582 6% 2,309 14%
Total overall complaints 98,632 51% 149,925 47%

Natalie Ceeney, chief executive and chief ombudsman, says: "These latest figures show a significant increase in the number of new PPI complaints referred to the ombudsman during the first half of 2011.

"This period coincided with the time when most of the high street banks and some other financial businesses had put PPI complaints on hold, because of their legal challenge against the ombudsman service and FSA.

"As a result, complaints in this period about PPI were harder fought, and harder to resolve - particularly if we found in favour of a consumer. This data therefore gives only a partial view on the cases which we were working to resolve over this period."