The Financial Conduct Authority (FCA) has told banks to reassess payment protection insurance (PPI) complaints they've ignored or underpaid.

The complaints, worth a total of about £2.5m, were rejected between the end of 2012 and the beginning of 2013, mainly due to technicalities in the assessment criteria, the FCA said in a statement on Friday.

However, the UK's financial regulator has deemed the number of complaints reject to be too high and has instructed lenders to review some of the cases.

Of the over 13m complaints about mis-sold loan insurance banks have handled, 70% of them have been upheld, while firms have paid out over £16bn in compensation.

In the two decades between 1990 and 2010, over 45m PPI policies, worth an estimated £44bn, were sold by British banks, though according to the FCA many banks often overstated the insurance's benefits.

Lloyds has provisioned some £10.4bn to compensate its customers, while Barclays has set aside £4.85bn.

The FCA said in a statement that 3.2m customers who may have been mis-sold PPI have been contacted by British banks, with a further 2m letters set to be sent.

DC

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