Banks have cleared around 95% of their massive backlog of complaints regarding mis-sold payment protection insurance (PPI).
Banks were told to deal with 200,000 PPI complaints after losing a High Court test case in April. The FSA gave them until the end of August to either offer compensation or reject the claims.
Margaret Cole of the FSA said: "We are encouraged that most firms have used the time extension to clear the backlog of complaints received during the judicial review."
A large number of new complaints were made after April due to the high levels of publicity surrounding the case. The banks have been given 12 weeks to deal with cases received after April, but before 31 December.
Not all PPI complaints from customers will lead to a bank offering a compensation payment. Those who are turned down have the right to pursue their complaints to the Financial Ombudsman Service (FOS), which has often found in favour of complainants.
At the start of August, the FOS revealed that it had been receiving 900 fresh PPI complaints every day and that these now made up 65% of its total workload. It has found in favour of customers in 55% of cases.
Read our mis-sold PPI information page for more information.
