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SMEs involved in banking disputes have 'nowhere to turn', FSB warns

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'.

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.' 

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020 7794 5757

Numera, 4th Floor Charles House, 108-110 Finchley Road, London NW3 5JJ

Numera is a trading name of Numera Partners LLP | Company Registration No. OC365787 | Place of Registration: England & Wales | Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales.

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Numera is a newly established forward-thinking firm of chartered accountants, with over 25 years in experience of audit, accountancy, taxation and business advisory services.

We work with clients in a large variety of industries and sectors; from sole traders to multi-million pound turnover organisations. We aim to create and maintain a close relationship with our clients. By being so involved, we are able to identify opportunities for our clients as well as possible risks that our clients may be faced with.

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