The head of the City regulator today disclosed that two investigations into PPI complaint mis-handling are under way.

Two banks face fines for fobbing off an "outrageous” proportion of PPI complaints, the head of the City regulator disclosed today. Martin Wheatley, chief executive of the Financial Conduct Authority, said the number of legitimate payment protection insurance (PPI) cases rejected by banks was “absolutely not accetable”. He told the a committee of MPs that the watchdog “will take more enforcement actions" to combat complaint mis-handling. Such action typically results in a fine. He said two "large" investigations are under way, but did not name the banks in question. PPI was an insurance sold alongside loans and credit cards. Many customers have only later discovered they did not need the cover, or would have been unable to claim on it. Banks have been ordered to pay back premiums to anyone mis-sold and have put aside more than £18bn for compensation - double the cost of the Olympic games.

However, the Financial Ombudsman Service, which takes on complaints rejected by banks, has reported a huge rise in the number of complaints wrongly rejected by banks. It received a total of 266,228 new PPI cases in the first half of the year - a 26pc increase on the figure for the previous six months The Ombudsman upheld more than eight in ten complaints made against some institutions, the data showed, showing that banks routinely fob off legitimate cases. Mr Wheatley called these figures “outrageous” and referred to strong action already taken against Lloyds Banking Group, which was fined £4.3m in February for delaying PPI compensation to 140,000 customers. Further fines against two institutions are now expected. Lloyds appears to be struggling under the weight of complaints. The Ombudsman was deluged with cases against Halifax Bank of Scotland, the state-backed bank owned by Lloyds Banking Group, throughout the first half of 2013.......Read more here