THE number of complaints to financial service firms fell by more than 500,000 in the first half of the year suggesting the peak of the payment protection insurance (PPI) scandal may have been reached.

According to the Financial Conduct Authority there were 2.9 million complaints between January and the end of June, which was down 15% from the 3.4 million recorded in the previous six months.

Barclays came top of the league with 370,733 in the period although that was only because Lloyds Banking Group is split into Bank of Scotland, which got 222,249, and Lloyds TSB Bank, which opened 253,735 complaints.

MBNA, which had 237,103, and Santander UK, at 198,736 made up the rest of the top five individual brands.

The entire top five saw double digit percentage falls in complaint numbers when compared with the second half of 2012.

Lloyds Banking Group's customer service director Martin Dodd said the group received an average of one complaint per 1000 accounts in the period which was an improvement from 2012.

He added: "We have continued to make significant improvements to our customer service and this is highlighted by the fact that, as a group, we now receive fewer banking complaints per thousand accounts than any other major bank."

Ashok Vaswani, chief executive of retail and business banking at Barclays, said total complaints excluding PPI were down 46% per cent to 91,215.

He said: "Whilst the number of complaints we receive is reducing sustainably as we work hard to put our customers at the heart of everything we do, this is no time for self-congratulation. Even one unhappy customer is one too many which is why we must always strive to learn lessons on how we can do better."

Royal Bank of Scotland saw gripes about its services fall from 102,962 to 101,901 while NatWest, also owned by RBS, was also down slightly from 186,611 to 185,510.

Jane Howard, RBS UK retail head of customer experience, said: "We are focused on improving the way we use the essential feedback from our customers through complaints and on getting to the root of problems our customers raise with us before they occur.

"We're also focusing efforts on bringing complaint handling back to the frontline; investment in our processes and technology in branch and telephony will help our customer facing staff to resolve a complaint at first point of contact - we understand how important it is to our customers that the first person they speak to is able to help set things right."

Clydesdale Bank saw its numbers drop from 26,541 to 23,268 while complaints to the embattled Co-operative Bank rose from 22,120 to 24,055.

The FCA said 51% of complaints were upheld in the half-year with £2.55 billion paid out in compensation.

Martin Wheatley, the FCA's chief executive, said: "We expect firms to put their customers at the heart of their business - an important part of this is the way they handle customer complaints.

"Publishing complaints data is a powerful tool that helps encourage competition between firms to improve their service to customers, and help consumers assess their relationships with banks and other providers."

General insurance and pure protection products, which include PPI, accounted for the bulk of the payments at £2.4bn with £54 million attributed to investment products and £52m for banking products including current accounts and credit cards.

In total, 61% of complaints across the industry related to the mis-selling of insurance on loans and mortgages. Banks have so far set aside £16bn to compensate customers mis-sold PPI in what is the most expensive consumer scandal ever in Britain.

The 92% of complaints closed within eight weeks was the highest percentage since the data was first published in 2006.