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By Matt Scuffham
LONDON, March 5 (Reuters) - Britain's Financial OmbudsmanService received nearly two-and-a-half times as many complaintsrelated to mis-sold loan insurance in the second half of 2012than in the first half, pointing to a further rise in the billfor banks.
Banks have already set aside around 14 billion pounds ($21billion) to compensate customers wrongly sold payment protectioninsurance (PPI). The policies were supposed to protect borrowersagainst sickness or redundancy but were often sold to customerswho didn't want or need them.
The ombudsman, which settles disputes where banks and theircustomers cannot reach an agreement, said on Tuesday it receivedjust under 212,000 complaints related to the mis-selling of PPIin the second half of 2012, after 86,000 in the first half.
In an interview with Reuters on Monday, Chief FinancialOmbudsman Natalie Ceeney said the number of claims against UKbanks for mis-sold insurance on loans and mortgages had reached"staggering levels" and would take years to pay back.
The ombudsman has now received more than 600,000 complaintsabout PPI making it the most complained about financial productever in Britain. The second highest is mortgage endowments,about which the ombudsman received 350,000 complaints.
