Complaints against UK banks rise by 15 percent - Ombudsman

By Matt Scuffham

LONDON, Sept 3 (Reuters) - The number of complaints againstBritish banks grew by 15 percent in the first half of 2013driven by complaints over the mis-selling of loan insurance, theFinancial Ombudsman Service said on Wednesday.

The ombudsman, which deals with cases in which banks andtheir customers cannot settle a dispute, said it received327,000 complaints during the period. Complaints about paymentprotection insurance (PPI) rose by a quarter to 266,000.

PPI policies were meant to protect borrowers againstsickness or unemployment but were often sold to those who didnot want or need them. Banks have already set aside 15 billionpounds ($23 billion) for compensation and senior bankers believethat number could rise to 20 billion.

Chief Ombudsman Natalie Ceeney said the ombudsman was makingprogress in tackling what is widely accepted as the biggestfinancial mis-selling scandal ever in Britain. However, she saidalthough some major businesses were focusing on sorting outcustomer concerns more quickly, others were dragging their feet.

"Disappointingly we are still seeing cases where businessesare not following our long-standing approach to PPI, resultingin long waits and unnecessary delays for consumers," she said.

The number of complaints received by the ombudsman whichdidn't relate to PPI fell by 15 percent to 61,000. That includeda fall of 22 percent in banking complaints and 3 percent ininsurance cases.