Complaints to U.K. financial services firms increased by 59 percent, largely driven by payment protection insurance, or PPI, the Financial Services Authority said in a statement.

A Lloyds Banking Group Plc (LLOY) unit received the largest number of complaints on general insurance and pure protection in the first six months of 2012 with 81 percent of the complaints upheld by the firm, according to data published on the FSA’s website today. Santander UK Plc attracted the most complaints on banking and home finance for the same period.

British regulators said last year that consumers may receive as much as 9 billion pounds ($14.6 billion) in compensation as a result of improper sales of PPI. The FSA said in June that banks will also repay small and medium-sized businesses for improperly sold interest-rate derivatives.

Customers who bought PPI rarely compared prices and terms or switched providers, and usually weren’t aware they could have purchased it from other companies, the U.K.’s Competition Commission has said.

Lloyds said complaints, excluding PPI and general insurance, fell by 18 percent and banking complaints were down 21 percent.

“This is equivalent to 1.4 complaints per 1,000 customers, compared to 1.7 at the same point last year and 2.1 at the end of 2010,” according to an e-mailed statement from Emma Partridge, a spokeswoman for Lloyd’s Halifax unit. “On this basis the group continues to receive fewer complaints than any other bank.”

Banking complaints rose by 5 percent during the period.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.