More small businesses may have access to the Financial Ombudsman Service, according to a new consultation launched.
Under changes proposed by the FCA, around 160,000 additional SMEs, charities and trusts would be able to refer complaints to the Ombudsman.
Changes the eligibility criteria would include businesses with fewer than 50 employees, annual turnover below £6.5 million and an annual balance sheet (i.e. gross assets) below £5 million.
Currently only individual consumers and around 5.5 million micro-enterprises (the smallest type of business) can access the Ombudsman if they have a dispute with a financial services firm, and businesses that cannot access the Ombudsman would need to take the firm to court.
However, the FCA believes that many smaller businesses within this group struggle to do so in practice.
Andrew Bailey, chief executive at the FCA, said: “It is important for everyone, including financial services firms, that there is an effective dispute resolution mechanism for businesses.
“Our evidence suggests some small businesses currently find it hard to achieve a fair outcome in disputes with financial services firms because court action is not a realistic option for them.
“We have considered what could be done within our powers and the remit of the Financial Ombudsman Service to improve this situation and are proposing to expand access to the Ombudsman.”
The FCA is asking for responses to the consultation by 22 April 2018 and intends to publish a Policy Statement making final rules in summer 2018.