The latest report from the Financial Services Ombudsman shows a slight rise in the number of consumers lodging complaints about their financial institutions.

Some 3,700 complaints were received in the first half of 2012, which represents a 5% increase on the last six months of 2011.

The figures also show the number of people who complained about Payment Protection Insurance has almost doubled to over 400.

Dissatisfaction with the insurance sector accounted for most of the complaints.

Around 1,900 complaints against insurance providers were lodged with nearly a quarter concerning the Payment Protection product and its alleged mis-selling.

Over 1,000 complaints were also received from those unhappy with their banks.

The most common complaint concerned mortgages and repayment terms.

Overall, out of the total 1,600 complaints that were dealt with during the six-month period, 72% were not upheld and 28% were either upheld or partly upheld.

The total paid in compensation amounted to €790,000.

The Ombudsman said the rise in complaints shows the industry is not rising to the challenge of the economic crisis.

Speaking on Morning Ireland, Bill Prasifka said it is time institutions took responsibility and properly dealt with complaints.

"The institutions have to be encouraged to properly manage complaints,” he said.

He said providers should aim “to do as well as their peers if not better”.