FCA chief executive Andrew Bailey has expressed concern over how complaints from small firms are treated.
While attention has been turned towards the behaviour large banks after the financial crisis, small firms do not have an adequate way of resolving their own complaints against them, Bailey said in a visit to Yorkshire yesterday.
Bailey said: “One of the things I am very involved in at the moment with Parliament is the question of having an adequate complaint resolution mechanism for small firms.
“There isn’t one at the moment.”
While the Financial Ombudsman Service is predominantly geared towards resolving complaints from individuals, Bailey said work was now underway with MPs to help small firms who have complaints against banks avoid the costly process of court.
Bailey said: “One of the things that is very clear from looking at the recent cases, interest rate hedging…is a prime example, is that there’s a missing piece, in my view, in the landscape.
“Which is, ‘How do small firms feel they can get independent resolution of their complaints, when they have complaints against banks?’
“All sorts of schemes have been put in place to deal with individual issues in recent years, but it’s fair to say that small firms have strong doubts that this has been effective.
“It’s in the interests of everybody, including the banks, that there is an effective dispute resolution mechanism for small firms.
“You can’t say to small firms, ‘Just go off to court.’
“Taking a bank to court is an expensive business. They will quite rightly turn round and say, ‘We can’t do that.’
“That goes also with the question of looking at our role in regulation, that’s actually a matter for Parliament.
“But I am very keen, and a number of MPs have now taken this up, and the Government have said they will look at it.”