Customers have lodged nearly 2,400 complaints a week
There has been a 30% rise in the number of complaints made to the Financial Ombudsman Service (FOS).
Formal complaints totalled 123,089 in the last financial year, reversing the decline seen during the previous year.
The Ombudsman said this was mainly due to a sharp rise in complaints about bank overdraft charges and payment protection insurance (PPI).
Most complaints made were turned down, apart from those regarding bank charges and credit cards.
"By the end of the 2007-08 financial year we had received more new complaints than in any year since the ombudsman service was established," said the FOS chairman Sir Christopher Kelly.
The FOS received nearly 32,000 bank charge complaints in just the first four months of the last financial year.
Most common financial complaints 2007-08
Bank charges 31,618
Credit cards 14,123
Mortgage endowments 13,778
Payment protection insurance 10,652
That was nearly 10 times as many as in the whole previous year, reflecting the huge rise in consumer discontent over the issue.
But at the end of July it stopped dealing with any new or current cases.
That was part of the deal between the banks and the Office of Fair Trading which led to all new cases being frozen in the banking and legal system, as part of a plan to ask the High Court to resolve the legal issues involved.
As a result, 14,000 bank charge complaints were put on ice at the FOS.
The litigation to decide the fairness of bank overdraft charges is now likely to last well into next year so it will probably not be until then that the FOS re-examines its cases.
"It's massively unfair and is to be deplored," said Marc Gander of the Consumer Action Group.
"Many thousands more people are stuck in the courts, unable to enforce their rights while the banks are allowed to continue applying their charges unfettered," he added.
Payment protection Insurance
A sudden surge in complaints about PPI hit the FOS in the first three months of 2008, prompted by media and internet campaigns on the issue.
There were 10,652 complaints for the whole of 2007-08, up significantly from 1,832 the year before.
The consumers association Which? claimed that as many as two million people may have been mis-sold PPI policies in the past five years.
"We've always known that people were being mis-sold PPI, but we were still amazed to discover the scale of it," said Doug Taylor of Which?
"If you have a loan and think you might have been mis-sold PPI, now's the time to fight back," he added.
The fact that thousands of bank charge complaints were put on hold contributed to an 11% drop in the number of all cases actually resolved by the Ombudsman.
These fell by 11% from 2006-07 to 99,699.
An additional reason was the difficulty in resolving some of the remaining complaints about the mis-selling of mortgage endowment policies.
These used to be the single biggest source of complaint but have dwindled sharply in the past few years.
Overall the number of new cases dropped in one year from 46,134 to just 13,778.
However the fact that some of the remaining complaints were more difficult to deal with meant that they took longer than before to resolve.
The Ombudsman noted that 19% of all complaints came from claims handling businesses which typically take a cut of any compensation they gain.
The FOS said in some cases the complainants were not being represented properly.
"In the specific context of pension-related complaints involving SERPS, we have seen a significant number of cases this year where some claims-management companies have given consumers unrealistic expectations of large sums of compensation in cash, without appearing first to have properly assessed the actual merits of the individual cases," said the FOS report.
Despite the upsurge in complaints overall, approaching the FOS is not a one-way ticket to success.
Only 32% of complaints about mortgage endowments were upheld.
Most other areas of complaint - covering banking, investment and insurance - also saw the Ombudsman uphold a majority of the decisions made by the financial services companies.
Only for current account complaints (84%) and credit cards(79%) did consumers win most of their claims.