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Small and medium size enterprises (SMEs) with a turnover between £6.5 million and £10 million and a balance sheet up to £7.5 million will soon be able to have their banking and finance disputes reviewed and redressed through alternative dispute resolution arrangements, following the creation of a specialist ombudsman service with the expertise and powers to address larger and more complex cases for eligible SMEs.
UK Finance, the trade body that represents the banking and finance industry, has set out its response to the recommendations of Simon Walker’s independent Review (the “Review”) of alternative dispute resolution (ADR) for SMEs. These proposals have been developed with the agreement of the seven main SME banking providers. The Review provided valuable insight into the impact of the financial crisis on SMEs and the subsequent hardship experienced by a number of individuals and businesses involved. UK Finance and its members acknowledge there are valuable lessons to be learned from how the industry responded and are determined to improve the future handling of banking complaints for the vast majority of SMEs by delivering a series of proposals to deliver stronger and fairer outcomes for these customers.
These include an industry-wide commitment to forward looking dispute resolution for SMEs while supporting the extension of the Financial Ombudsman Service (FOS) to provide more SMEs with access to a simple and independent complaints review and redress mechanism.
In addition, the industry has committed to establishing an independent review process for unresolved legacy complaints brought forward by SMEs since 2008. This is alongside the creation of an independent SME advisory council with the ability to consider the treatment of SME customers and emerging issues and trends.