By Matt Scuffham
LONDON (Reuters) - Complaints against British banks fell sharply in the first half of the year and the sector dealt with customer concerns more quickly, Britain's financial regulator said on Wednesday.
The findings show the banks grappling with scandals such as mis-sold payment protection insurance (PPI), whose bill industry executives fear could rise to 20 billion pounds, though the flow of customer complaints remains high.
The Financial Conduct Authority (FCA) said it received 2.9 million complaints in the first half of 2013 - mainly about the banks as opposed to other parts of the financial services sector - compared with 3.4 million in the previous six months.
Some 51 percent of complaints were upheld and 2.55 billion pounds was paid out in compensation, the regulator said, while 92 percent of complaints were dealt with within eight weeks of being made, the highest percentage since the regulator began publishing the data in 2006.
"We expect firms to put their customers at the heart of their business - an important part of this is the way they handle customer complaints," said FCA Chief Executive Martin Wheatley.
Barclays received 370,733 gripes about its services, the most of any bank. However, that was down 11 percent on the previous six months. The next highest was Lloyds TSB, which received 253,735 complaints, although that was down 27 percent.
In total, 61 percent of complaints across the industry related to the mis-selling of insurance on loans and mortgages, known as payment protection insurance or PPI.
Banks have so far set aside 16 billion pounds to compensate customers mis-sold PPI in what is the most expensive consumer scandal ever in Britain.(Editing by David Holmes)