You are here: Home - News -

FCA consults on FOS extension to cover SMEs

by:
  • 22/01/2018
  • 0
FCA consults on FOS extension to cover SMEs
The Financial Conduct Authority (FCA) is consulting on widening access to the Financial Ombudsman Service (FOS) for small businesses.

The regulator revealed that its proposals could add between £1.11m and £7.54m in redress paid to newly-eligible SMEs per year. This in turn could affect the levy paid by advisers.

However, it highlighted that certain sectors, particularly insurance were more likely to be affected by the change.

The FCA’s proposals will include small and medium enterprises under the FOS redress scheme based on three criteria:

  • annual turnover of less than £6.5m
  • annual balance sheet total of less than £5m
  • fewer than 50 employees.

It suggested this would give a further 160,000 SMEs access to the FOS.

As long as a complainant is eligible, the Ombudsman can consider complaints about any regulated activity; it can also consider complaints about some unregulated activities, such as, lending to companies or the activities of business turnaround units.

The FCA also proposes to extend eligibility to personal guarantors of corporate loans, provided the borrowing business also meets the eligibility criteria.

At the moment only individual consumers and around 5.5 million micro-enterprises can access the Ombudsman if they have a dispute with a financial services firm.

 

Court action not realistic

FCA chief executive Andrew Bailey (pictured) said: “It is important for everyone, including financial services firms, that there is an effective dispute resolution mechanism for businesses.

“Our evidence suggests some small businesses currently find it hard to achieve a fair outcome in disputes with financial services firms because court action is not a realistic option for them.

“We have considered what could be done within our powers and the remit of the Financial Ombudsman Service to improve this situation and are proposing to expand access to the Ombudsman.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Bridging

Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.

Commercial

Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions
Read previous post:
Zoe Haddon
Natwest appoints new BDMs and sales managers

Natwest Intermediary Solutions has appointed a number of new business development managers (BDMs) to join the team, as well as...

Close