Small and medium-sized enterprises (SMEs) will have access to a new independent service to assist in resolving disputes with banks.
The Business Banking Resolution Service (BBRS) has been set up following a commitment in the wake of a review into small business complaints and will operate to settle complaints from larger SMEs with seven participating banks.
The scheme will have an awards limit of £350,000, with £650,000 for the scheme to be moved to a default position in which the full amount of any claim should be paid without limit.
The scheme allows for former directors and shareholders of dissolved companies and enterprises to bring complaints so that the dissolved entity will be considered, while the date of mistreatment has been extended to claims dating from 2001.
There are two separate systems operating within the scheme, looking at historical claims and contemporary claims:
- The Historical Scheme – Exploring cases from 1 December 2001 to 31 March 2019. This is for firms with a turnover of up to £6.5 million per year, with total assets up to £5 million, that were not able to make a complaint to the Financial Ombudsman Service and have not had access to an independent review
- The Contemporary Scheme – Dealing with cases from 1 April 2019 onwards, for firms with a turnover of up to £10 million per year, with assets of up to £7.5 million, which are not able to make a complaint to the Financial Ombudsman Service.
Martin McTague, National Vice-Chair of the Federation of Small Business, said: “Access to finance will be absolutely critical to small firms as the economy recovers. That’s why it’s been worrying to see some stuck between a rock and a hard place where redress is concerned: too big for the Financial Ombudsman Service, too small for the courts.
“We believe the BBRS can provide a meaningful option for these firms in future. Delivery is key, and we’ll work closely with the service to ensure it is fulfilling its function effectively.”
Find out more about the Business Banking Resolution Service.