The UK´s Financial Conduct Authority (FCA) has proposed to widen access to the Financial Ombudsman beyond just consumers and micro-enterprises, giving thousands of other organisations the right to bring complaints.
It comes after RBS and Lloyds established voluntary compensation schemes for SMEs due to widespread complaints over lending practices.
In a consultation paper released on Monday, the FCA said it was intending to give around 160,000 additional SMEs, charities and trusts the right to bring complaints through the Financial Ombudsman.
“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,” said Andrew Bailey, chief executive at the FCA.
He added that more material changes, such as changing the basis for the way the Ombudsman makes decisions to enable it to deal with significantly higher value disputes, would require legislation.
At present, only individual consumers and around 5.5 million micro-enterprises can access the Ombudsman if they have a dispute with a financial services firm. Businesses that cannot access the Ombudsman would need to take the firm to court.
However, the FCA maintains that many smaller businesses within this group struggle to do so in practice.
Under the changes proposed by the FCA, approximately 160,000 additional SMEs, charities and trusts would be able to refer complaints to the Ombudsman. This would be done by changing the eligibility criteria to access the Ombudsman, so businesses with fewer than 50 employees, annual turnover below £6.5 million and an annual balance sheet below £5m would become eligible.