Complaints to ombudsman rise 54 pct to 150,000 and complaints about Payment Protection Insurance (PPI) account for two thirds of total.

Consumer complaints about British banks and other financial companies soared in the first six months of the year, driven by widespread disputes over controversial PPI, the financial ombudsman said. The ombudsman, which acts as mediator when banks and their customers fail to resolve disputes, had a total of 149,925 complaints referred to it in the first half of 2011, a 54 percent increase compared with the previous six months.

Complaints about Payment Protection Insurance (PPI), which allows borrowers to keep up debt repayments in the event of a loss of income, accounted for two thirds of the total. Regulatory investigations have revealed that PPI, typically taken out alongside loans, was widely mis-sold to consumers.Britain’s leading banks this year took billions of pounds in charges to cover refund payments to customers after losing a court appeal in April.

The ombudsman said the higher volume of dispute referrals in the first six months was partly driven by banks’ decision to put PPI complaints on hold pending the outcome of the court case. Just five financial institutions accounted for nearly half the complaints received.

Almost 20,000 of them related to Lloyds Banking Group, 41 percent owned by the taxpayer after receiving billions of pounds of emergency support in the 2008 financial crisis.

Sally Bowyer, Managing Director of Brunel Franklin said: “Everyone accepts that banks provide a valuable service and are entitled to make fair and reasonable charges for services. But people shouldn’t be sold PPI without being furnished with the full facts. PPI mis-selling cases serve as timely reminder of how careful we all need to be when taking out new loans and other credit card agreements.”

Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51