30 Oct 2023
Following the Financial Conduct Authority's (FCA's) decision not to expand the eligibility threshold for the Financial Ombudsman Service (FOS) beyond businesses with a turnover of £6.5 million, the Federation of Small Businesses (FSB) has warned that firms have 'nowhere to turn'.
The FCA stated that its assessment looked at whether changes were required to allow larger small and medium-sized enterprises (SMEs) access to the FOS. Under the current rules, SMEs are permitted to access the service if they have a turnover of less than £6.5 million and fewer than 50 employees, or a balance sheet total of less than £5 million.
The FCA said these thresholds cover 99% of the 5.6 million private sector businesses in the UK.
Responding to the FCA's decision, Tina McKenzie, Policy Chair at the FSB, said: 'This FCA decision means many SMEs involved in banking disputes will be forced to take the risk and expense of taking their bank to court.
'Even businesses towards the larger end of the SME scale may still encounter a considerable imbalance of power when going up against banks, with their enormous legal resources.
'If the FOS thresholds aren't to be increased, another solution is needed to keep cases out of the overburdened courts system.'