LONDON (Reuters) - Complaints about financial services firms rose by 13 percent in the second half of last year, driven by an increase in grievances about the mis-selling of payment protection insurance after an ad campaign featuring Arnold Schwarzenegger.
Complaints to the Financial Conduct Authority (FCA) about PPI were at their highest in more than four years, at 1.55 million - a 40 percent increase on the first half of 2017. That took total complaints to 3.76 million, up by 427,000.
PPI has proven Britain’s costliest ever consumer scandal, with banks paying out more than 44 billion pounds so far to compensate people who purchased often worthless PPI thinking it would help them repay debts in the event of sickness or unemployment.
A campaign by the FCA, featuring an animatronic head of U.S. politician and actor Schwarzenegger, has prompted another surge in complaints since it was launched last August, forcing many banks to up their provisions for the scandal.
“We are continuing to monitor and challenge all firms to ensure they maintain the expected standards and are delivering on their commitments to make it easy for people to complain about PPI,” said Christopher Woolard, executive director of strategy and competition at the FCA.
In January 2018, firms paid out a total of 415.8 million pounds in redress to consumers mis-sold PPI - the highest figure since March 2016.
Shares in mid-sized British bank CYBG fell 6 percent on Wednesday after the lender said it had increased provisions for PPI by 350 million pounds.
A number of Britain’s other lenders are expected to follow suit at their first quarter results, which kick off next week.
Excluding PPI, the number of complaints about financial firms fell by 13,000 during the second half of the year.
The second most complained about product was current accounts, with 509,047 complaints, followed by credit cards with 314,586 complaints.
Reporting by Emma Rumney; Editing by Keith Weir