Credit, collections & insolvency news
MPs on the Treasury Committee have warned that SMEs face “gaps” in banking dispute resolution when an independent compensation scheme closes, questioning whether the Financial Ombudsman Service’s (FOS) jurisdiction is appropriate to handle cases from the Business Banking Resolution Service (BBRS).
MP John Baron said there was “uncertainty around the future of dispute resolution services for SMEs,” adding that firms had “deep frustration at the way the dispute resolution landscape is operating” amid concern that the system is biased towards big banks.
Abby Thomas, Chief Executive and Chief Ombudsman at the Financial Ombudsman Service noted that the end of the BBRS would leave some businesses ineligible for FOS support. She dsid “I think there are other options available to those businesses. So the courts are an option, arbitration is a further option.”
The BBRS has been criticised for resolving just 137 of more than 1,000 cases over three years of operation. When quizzed on this by the committee, Mark Grimshaw, Chief Executive of the BBRS, pointed to tight eligibility criteria which governs which cases it can take on, saying it is that “eligibility constraints that makes life difficult for us.”
