By Matt Scuffham
LONDON (Reuters) - The number of complaints against British banks grew by 15 percent in the first half of 2013 driven by complaints over the mis-selling of loan insurance, the Financial Ombudsman Service said on Wednesday.
The ombudsman, which deals with cases in which banks and their customers cannot settle a dispute, said it received 327,000 complaints during the period. Complaints about payment protection insurance (PPI) rose by a quarter to 266,000.
PPI policies were meant to protect borrowers against sickness or unemployment but were often sold to those who did not want or need them. Banks have already set aside 15 billion pounds ($23 billion) for compensation and senior bankers believe that number could rise to 20 billion.
Chief Ombudsman Natalie Ceeney said the ombudsman was making progress in tackling what is widely accepted as the biggest financial mis-selling scandal ever in Britain. However, she said although some major businesses were focusing on sorting out customer concerns more quickly, others were dragging their feet.
"Disappointingly we are still seeing cases where businesses are not following our long-standing approach to PPI, resulting in long waits and unnecessary delays for consumers," she said.
The number of complaints received by the ombudsman which didn't relate to PPI fell by 15 percent to 61,000. That included a fall of 22 percent in banking complaints and 3 percent in insurance cases.
(Editing by David Evans)