PPI complaints are rising fast
The Financial Ombudsman Service (FOS) says it deals with more than 800 complaints a week about payment protection insurance (PPI).
A spokeswoman said the number they were upholding was "unprecedented."
The insurance is supposed to pay out if someone is unable to relay a loan because of illness or redundancy.
But the insurance has been heavily criticised by consumer groups like Which?, which has launched an online tool make complaints simpler.
There are more than 12 million PPI policies in force.
"It is still the single biggest source of complaint, amounting to about a third of the total," said a spokeswoman for the FOS.
"We are upholding about 90% of the cases we deal with, and with one firm 100% of the cases," she added.
Consumer groups say there are frequent restrictions on when a customer can claim, and that the insurance has often been mis-sold to customers taking out a loan.
In the past few years the authorities such as the Office of Fair Trading, Competition Commission and the Financial Services Authority (FSA), have taken an increasingly dim view of PPI, which is very lucrative for the banks and other lenders which sell it.
The Competition Commission recently decided to impose severe restrictions on the sale of new PPI policies.
Lenders and insurers are very reluctant to agree with a customer that their PPI has been mis-sold.
As a result, the number of complaints that were taken by disgruntled consumers to the FOS shot up last year, prompted by widespread media publicity.
The FOS received 26,234 PPI complaints, up from the 4,889 dealt with in 2007.
At the end of last year complaints were running at 500 a week, but that they are still increasing and last week alone a further 858 were lodged with the FOS.
"We are upholding an unprecedented number of consumer complaints about PPI," said an FOS spokeswoman.
"We have reported our concerns about some firms who seem to be systemically and deliberately mis-handling complaints," she added.
Last year the FOS asked the FSA to consider taking action against those firms which were being obstructive.
Which? is keen to encourage more people to complain about policies they have already been sold, but the organisation acknowledged it can seem a complicated process.
It said its online tool makes the process simpler.
"All people need to do is...select their provider from a drop down menu, fill in their contact and PPI details and answer some simple questions about why their policy was mis-sold," said a Which spokeswoman.
"Our tool then creates an email that can then be sent directly to the provider or a letter that can be printed off and posted."
A spokesman for the Association of British Insurers (ABI), whose members underwrite the policies, said it did not condone mis-selling.
"We accept there have been mistakes in the past - we think the complaints are mainly about secondary sellers such as garages," he said.
"But in this day and age for many people this insurance is valuable," he added.
Brian Capon, spokesman at the British Bankers' Association, said: "PPI continues to provide valuable protection if someone is unable to work through illness or loses their job and it is important that people are not discouraged from taking it out.
"There has been a vast amount of publicity about PPI recently which has no doubt been a factor in the rise in the number of complaints, but it is still disappointing to see.
"There are many different retail outlets that sell PPI, but from the banks' perspective, they invest a great deal of time in training their staff and if a customer feels they have been sold a policy inappropriately, they should contact their bank.
"The key features of the cover are made clear before the customer commits to taking out a policy and a bank should never make taking out a PPI policy with it a condition of agreeing a loan. It will always set out the separate costs of the loan and of PPI."