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FCA chief: Small firms lack ‘adequate complaint resolution’


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.”


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. Even more worrying is the there is no effective complaints handling process at the FCA – they are unaccountable at every level, to advisers and to their clients. An effective industry needs effective compliance, so we need to address that.

  2. Nicholas Pleasure 24th January 2017 at 9:28 am

    Martin Martin – spot on. Small advice firms need a robust complaint system against the regulator. I know the regulator hates being accountable but accountability will give up much better regulation.

  3. Microenterprises can use FOS like an individual. However that means fewer than 10 employees (including directors), and turnover, and assets, under the Sterling equivalent of €2 million.

    What does concern me is that we should not have a one size fits all solution which could allow a medium size business to take a microenterprise IFA to FOS.

  4. Things need to be kept in context. How many complaints are there against small firms ? I would say a very small number. Using A sledgehammer to crack a nut, just ain’t the answer .

    • I thought the gist of the article was small companies being able to complain against banks not claims against small companies. Other than that you are right, I think the instance of complaints against small regulated IFA’s is quite small.

  5. When under attack for one’s own litany of massive failures, launch an offensive on all the perceived failures of others (even though, by comparison, they’re mostly tiny). A standard distraction and deflection tactic. Put your own house in order Mr Bailey. By your declaration of the FCA’s “sorry history”, you’ve already admitted that this should be a top priority and you’ve even got the Treasury (supposedly) breathing down your neck. So stop “consulting” and start DOING. Please.

  6. I thought Banks were now regulated by the PRA?

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