FCA confirms greater access for SMEs to the Financial Ombudsman Service

The Financial Conduct Authority (FCA) has today confirmed plans to extend access to the Financial Ombudsman Service (‘the ombudsman service’) to more small and medium-sized enterprises (SMEs).

The changes will mean that SMEs with an annual turnover below £6.5m and fewer than 50 employees, or an annual balance sheet below £5m will now be able to refer unresolved complaints to the ombudsman service.  Under the ‘near-final’ rules published today around 210,000 additional UK SMEs will be eligible to complain to the ombudsman service.

Respondents to the FCA’s January 2018 consultation strongly supported the extension of the ombudsman service to larger SMEs, charities and trusts, and a new category of personal guarantors.  The changes will allow a wider number of SMEs to access the service, so they can seek redress.  The criteria for access to the service have been amended so that SMEs must only meet the turnover test and one of either the headcount or balance sheet total tests, not all 3 tests as previously proposed. The FCA made this change in response to feedback that applying all 3 tests would unfairly exclude certain types of SME, for example those with relatively low turnover but 50 or more employees.