The body's annual review reveals most grievances relate to sales procedures
The number of complaints about Payment Protection Insurance (PPI) made to the Financial Ombudsman Service (FOS) increased six-fold last year.
In its annual review, the body revealed the proportion of complaints regarding the sales processes of PPI had grown while the total number of complaints had risen from 1,832 to 10,652 in one year.
The review stated: "From the second half of 2006, we [the FOS] started seeing a distinct change in the type of complaints we were receiving. An increasing proportion of disputes focused on how PPI policies have been sold - and how they operated - rather than on insurance claims that had been rejected which had been the cause of nearly all complaints about payment protection up until then."
Other reasons given for the disputes were from customers who said they had not asked for a PPI policy, were unaware that they had one, had been told they needed to take a PPI policy out when the product was unwanted or were uninformed of features such as exclusions which would have made them ineligible for cover.
Matt Morris, policy adviser at LifeSearch, said the news was no surprise as mis-selling of the product has long been common practice.
He added: "Policies are notoriously full of exclusions which often make them worthless when they fail to pay out at the time help is most needed - and they often only offer 12 months of cover anyway."
The FOS also suggested the issues around PPI sales were becoming more well-known as consumers were utilising standard templates from newspapers and websites to complain.
Simon Burgess, managing director of British Insurance, said increased coverage of PPI's failings had led to the higher consumer consciousness: "The reality is ongoing media campaigns will mean people will be aware they can buy the cover at a fraction of a cover independently. They will realise that they have been mis-sold."
He added: "I'm surprised there weren't more complaints - the market is systematically failing consumers and operating to their detriment."
Morris also said the PPI debate is now in the mainstream press: "It could be because of the amount of negative press PPI received at the end of last year and early this year - The Independent ran a big front page story on it in January. This probably made consumers a lot more aware that maybe they didn't buy the right policy in the first place."
