FCA to look at widening FOS access to SMEs

The FCA has launched a consultation on plans to provide more access to the Financial Ombudsman Service (FOS) for SMEs.

At present, only consumers and around 5.5 million micro-enterprises can contact the FOS if they have a dispute with a financial services firm.

Under the proposed changes, approximately 160,000 additional SMEs, charities and trusts would be able to refer their complaints to the ombudsman rather than going to court.

Businesses with fewer than 50 employees, annual turnover below £6.5m and an annual balance sheet below £5m would become eligible to access the ombudsman following a change to criteria.

The ombudsman would then be able to consider complaints about any regulated activity and some unregulated activities, such as lending to companies or the activities of business turnaround units.

The FCA has also proposed to extend eligibility to personal guarantors of corporate loans.

Andrew Bailey, chief executive at the FCA, 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.”

The FCA has requested responses to the consultation to be received by 22nd April 2018 and intends to publish a policy statement on the final rules this summer.

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