Figures from the Financial Ombudsman Service (FOS) have revealed a steep rise in the number of complaints upheld against financial services companies.

The Ombudsman favoured the consumer in 57% of all the cases it investigated - a figure much higher than the long-term average of 30% to 40%.

It also favoured the customer in 89% of the complaints related to controversial payment protection insurance, and 75% of the cases involving credit card disputes.

The FOS report suggests that the unco-operative attitudes of the firms in question were putting off consumers from going ahead with their complaints.

The report blamed the current recession for the situation, saying that most companies are keeping an eye on their bottom lines and therefore not investigating the complaints registered by the consumer thoroughly.

The service received nearly 790,000 enquiries from consumers during the year to the end of March , leading to a record 127,471 new complaints being lodged.

Within this total, the number of complaints about payment protection insurance (PPI) tripled to 31,066, following a five-fold increase during the previous year.

Complaints about the insurance, which covers debt repayments if the holder is unable to work due to an accident or illness or if they lose their job, now account for nearly a quarter of the Ombudsman's workload.

But the service said the level of new disputes now appeared to have stabilised at a very high level, after increasing dramatically during the past two years following negative media coverage as the product was investigated by the Competition Commission.

Around 18,590 complaints were received against credit card providers, with people complaining about issues such as hikes in their interest rate and wrongly calculated monthly minimum repayments.

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