Consultation runs until April with rules set to be announced this summer.
The Financial Conduct Authority (FCA) has launched a consultation on plans to give more small businesses access to the Financial Ombudsman Service (FOS).
At the moment only individual consumers and around 5.5million micro-enterprises (the smallest type of business) can access the FOS if they have a dispute with a financial services firm.
In theory businesses that cannot go to the ombudsman can take a financial services firm to court.
However the FCA stated that it believes that many smaller businesses within this group struggle to do so in practice.
Charities
The watchdog detailed that under its proposed changes approximately 160,000 additional SMEs, charities and trusts would be able to refer complaints to the FOS.
If the FCA’s proposals are enforced eligibility criteria would become businesses with fewer than 50 employees, annual turnover below £6.5m and an annual balance sheet below £5m.
Andrew Bailey, chief executive at the FCA, said: “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 is asking for responses to the consultation by 22 April 2018 and intends to publish a Policy Statement making final rules in summer 2018.
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