FOS extension to cover more small businesses – Funding Options welcomes plans
3 November 2017
Funding Options, the online business finance supermarket, has welcomed FCA plans to allow more SMEs access to the Financial Ombudsman Service (FOS).
Funding Options called for the extension of the FOS two years ago, so more small businesses have an alternative to taking costly and lengthy cases through the justice system.
The FOS offers a low-cost method for small businesses and consumers to resolve their disputes with banks. As well as being free of charge, it is also quicker than taking a complaint through courts.
However, the FOS is currently only open to individuals and ‘micro enterprises’, which the FCA defines as companies with fewer than 10 people and a turnover that is less than €2 million.
Funding Options called for the extension of the FOS two years ago, so more small businesses have an alternative to taking costly and lengthy cases through the justice system.
Conrad Ford, Founder of Funding Options (www.fundingoptions.com), says:
“We have been lobbying for this for several years now, so we are delighted the FCA has finally taken steps to help more small businesses.”
“SMEs left the credit crunch and the swaps mis-selling scandal feeling unloved and even exploited by the banks.”
“Politicians and regulators promised small businesses a new deal, we are finally seeing that arrive – more small businesses will be able to appeal to the FOS.”
“Banks also now have to make use of the Bank Referral Scheme, which we hope in the future will make an even bigger contribution to filling the lending gap.”
Current situation
- access to the FOS is currently restricted to businesses with an annual turnover of less than €2 million and fewer than ten employees
- this rule denies tens of thousands of SMEs access to the FOS
Advantages of expanding the FOS regime
- the FOS offers a low-cost method for very small businesses and consumers to resolve their disputes with banks
- the FOS offers a resolution far more quickly than by taking a complaint through the court system