0 £0.00
This item was added to your basket
Credit Strategy homepage
LinkedIn
Twitter

Dear visitor,
You are viewing 1 of your 1 free articles


We’ve invested in our content to provide more news, analysis, features, interviews and opinions across a wide range of Credit and Financial Services. Register now to access more of the trustworthy, insightful information that’s on offer.

Register now or Login

FCA confirms greater access for SMEs to the Financial Ombudsman Service

The Financial Conduct Authority (FCA) has confirmed plans to extend access to the Financial Ombudsman Service (FOS) to more small and medium-sized enterprises (SMEs).

Share on LinkedInShare on TwittereCard

The changes will mean that SMEs with an annual turnover below £6.5m and fewer than 50 employees, or an annual balance sheet below £5m will now be able to refer unresolved complaints to the ombudsman service. Under the ‘near-final’ rules published today around 210,000 additional UK SMEs will be eligible to complain to the ombudsman service.

 

Respondents to the FCA’s January 2018 consultation strongly supported the extension of the ombudsman service to larger SMEs, charities and trusts, and a new category of personal guarantors.

 

The changes will allow a wider number of SMEs to access the service, so they can seek redress. The criteria for access to the service have been amended so that SMEs must only meet the turnover test and one of either the headcount or balance sheet total tests, not all three tests as previously proposed. The FCA made this change in response to feedback that applying all three tests would unfairly exclude certain types of SME, for example those with relatively low turnover but 50 or more employees.

Andrew Bailey, chief executive of the FCA said: “We recognise it is vitally important for SMEs to have a mechanism to resolve disputes and we are clear the Financial Ombudsman Service is the right route for this. The changes we are making are as far as we think we should go within our powers, but they will provide access to the ombudsman service for a significant number of smaller businesses. Before this their only option was potentially a costly legal one through the courts.

 

“The changes are an important extension of the ombudsman service’s role and remit. We will work closely with them to ensure that they are ready, so that SMEs are able to benefit from the new rules as soon as they come into force.”

 

The FCA has published near-final rules, "so the ombudsman service can start taking practical steps towards putting the extension of its remit in place", including starting recruitment of additional staff with the skills and experience required.

The FCA intends to publish final rules later this year, following its normal scrutiny of the ombudsman service’s draft business plan and budget. It is expected that the final rules on the SME extension to come into force on April 1, 2019.

 

Together with the near-final rules, the FCA has published a consultation on raising the maximum amount of compensation the ombudsman service can require financial services firms to pay out from £150,000 to £350,000.

Share on LinkedInShare on TwittereCard
Add New Comment
You must be logged in to comment. Login or Register to access enhanced features of the website.

GET THE LATEST INDUSTRY NEWS STRAIGHT TO YOUR INBOX

READ NEXT

Corporate insolvencies up 30% as personal insolvencies remain low

Corporate insolvencies up 30% as personal insolvencies remain low

PwC saves 1,800 jobs at Travelex

PwC saves 1,800 jobs at Travelex

Credit Strategy launches The Car Finance Confidence Tracker

Credit Strategy launches The Car Finance Confidence Tracker

Upcoming events

Credit Strategy
LinkedIn page

Member of

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace. @ Copyright Shard Media Group