The Financial Conduct Authority (FCA) has confirmed plans to extend access to the Financial Ombudsman Service to more small and medium-sized enterprises.
The changes will mean that SMEs with an annual turnover below £6.5m and fewer than 50 employees, or an annual balance sheet below £5m will now be able to refer unresolved complaints to the ombudsman service.
Under the ‘near-final’ rules published on 16th October around 210,000 additional UK SMEs will be eligible to complain to the ombudsman service.
In a further expansion of the jurisdiction of the ombudsman service, a new category of complainant will be introduced to create provision for personal guarantors, who until now have not had access to the service.
The proposed definition is: individuals who are not consumers and who have given a guarantee or security for an obligation or liability of a microenterprise or small business. This business will have to have been a micro-enterprise or small business on the date that the guarantor gave the guarantee or security.
Ascent does make any distinction in the approach it takes to handling different complainant categories (bar giving the appropriate referral rights) however firms should take note of the new incoming requirements and give due consideration as to how to identify cases eligible for appropriate referral rights, especially given the proposed approach of guarantor eligibility which is defined at the point of lending and not the point of complaint.
We have published near-final rules on extending access to the Financial Ombudsman Service (‘the ombudsman service’) to more small and medium-sized enterprises (SMEs), as well as larger charities and trusts, and a new category of personal guarantors. Our near-final rules set out the eligibility criteria that these complainants must meet to be able to refer complaints against financial services firms to the ombudsman service.