The Financial Ombudsman Service has underestimated the scale of the PPI mis-selling crisis in its budget published last month, said a trade body.
Nick Baxter, non-executive independent chairman for the Professional Financial Claims Association, said the FOS has misunderstood the current position.
In proposed budget for 2014/2015 the Ombudsman said the number of new PPI cases per week had fallen to 6,000 from a level of over 12,000 over the last two years.
And for planning purposes it is assuming this trend will continue into 2014/2015 where it expects to receive 3,000 cases on average per week.
He said: "Members of the PFCA are still being contacted by record numbers of clients daily and the trend is not reducing.
"Obviously claims management companies are at the start of the complaint process and FOS only get involved where the complaint and product provider cannot reach an agreement. But if the current rejection ratios stay as they are, FOS will see not see the anticipated reduction they expect, or hope, to see."
Baxter expects a spike in complaints to hit the FOS at some point towards the middle of the year owing to the lag time between complaints being received today and the length of time it takes to go through the dispute process.
He added: "On current evidence, the ambitious comment in the FOS January/February 2014 Ombudsman News: "I am pleased to say, though, that over the next year or so the prospect of putting PPI behind us will get closer." seems more than a little premature and optimistic."
A spokesman for the FOS said: "We published our plan and budget public consultation last month.
"Once the consultation period has ended we will assess all replies and review our proposals if required."
The consultation period is open until 17 February and a final budget will be submitted to the Financial Conduct Authority in March.
