Complaint formThe powerful Treasury Select Committee has raised doubts whether the Financial Ombudsman Scheme (FOS) will be ready to take on small business complaints by December 2018.  The deadline has been proposed by the Financial Conduct Authority (FCA), which oversees the FOS.

The regulator has been consulting on whether to allow disputes between SMEs and financial services businesses to be resolved by the FOS.  The move comes in the wake of the alleged mistreatment of SME customers by the Royal Bank of Scotland’s Global Restructuring Group.

Now the Treasury Select Committee has written to the FCA to raise alarm bells.  Chairwoman Nicky Morgan wrote: “The committee is doubtful as to whether the FOS is ready for an increase in its remit within the FCA’s timeline.”

The already-damaged public confidence in the FOS will be damaged even further if these changes are rushed through.”

In response, FCA Chief Executive Andrew Bailey said he recognised the need to give the FOS enough time to prepare.  The ombudsman had earlier told the committee that it was preparing on the assumption that the new regime would be in place by December. 

The Select Committees’ findings follow an independent review into the FOS by a former director of consumer group Which. The review said that the ombudsman was struggling to cope with the demands of handling existing PPI claims and an organisational restructure.

 “Right now, SME businesses, including professional firms, face an uphill battle if they are in dispute with a major financial institution,” said James Burgoyne, Director – Claims & Technical, Brunel Professions.  “Giving SME’s access to the FOS will level the playing field in this area. But the FOS also deals with complaints against advisers, so the new proposals can only cause concern when there are currently doubts that the ombudsman has the resources and structure to handle an expanded remit consistently and proportionately.”

The FCA’s consultation document has been published on its website.  Reports on the Select Committees’ warning have been published by FT Adviser and Leasing Life.

Brunel secures competitive professional indemnity insurance cover for financial advisers. To find out more call Mark Sommariva on 0203 475 3275.