Four out of five complaints about payment protection insurance are being upheld, the Financial Ombudsman Service has said.

Figures released this week showed that it had received 1,499 complaints about PPIs in January alone – compared to 1,832 for the whole of the 2006/7 financial year.

PPI is supposed to cover repayments on loans, mortgages and credit cards if the holder cannot afford them because of accident, sickness or unemployment. However, it has been criticized for being expensive and difficult to claim on.

“There was a record number of complaints about PPI in January and the number is increasing month-on-month,” said Financial Ombudsman Service spokesman Emma Parker. “The fact that so many are being upheld suggests that firms aren't doing enough to deal with these complaints before they come to us.”

The Ombudsman said that 80 per cent of complaints were being upheld, compared to 32 per cent for buildings insurance, 43 per cent for motor insurance and 34 per cent for travel insurance.