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MP demands that bank debt services be deleted

UPDATED: Kevin Hollinrake MP, a member of the Treasury Selection Committee, called for the abolition of small business banking shields.

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UPDATED: Kevin Hollinrake MP, a member of the Treasury Selection Committee, called for the abolition of small business banking shields.

The times reported that the Business Banking Resolution Service (BBRS) has been overseeing only six financial grants for nearly two and a half years since it began accepting business.

The BBRS, a voluntary ombudsman set up to deal with any banking dispute between small businesses and high street banks, cost at least £ 23 million to set up.

The ombudsman was set up after thousands of companies were damaged by banking scandals. It gives small businesses an independent view on bank disputes. It is financed by seven banks but is independent of them.

According to The timesthere were only six financial grants – including modest “emergency and inconvenience” payments – regardless of whether complaints were upheld.

The BBRS did not tell the newspaper how many of these payouts were the results of sustained complaints and did not want to say how many were paid out.

Since its launch, the BBRS has been criticized for having difficult admissions criteria, for example only open to larger SMEs with a turnover of up to £ 10m per year and assets of up to £ 7.5m. The Financial Ombudsman Service (FOS) continues to handle disputes on behalf of smaller SMEs.

Mr Hollinrake, a Conservative MP, told the newspaper that “severely limited fitness rules” were to blame for the scheme’s poor performance and that these rules “conspired” to avoid the very things we had been working so hard for – justice and compensation for those who have been denied it under previous defective redress schemes. ”

He said the scheme should be scrapped in favor of raising qualification limits for businesses at the FOS.

By the end of March, the SME bank debt service had received only 776 “registrations”, of which 161 were still “alive”. At the launch, the BBRS said it was expected to investigate anything up to a thousand cases.

However, the BBRS said Small business that by 31 March it had reached 22 settlements, of which 12 were negotiated directly with banks via ADR (Alternative Dispute Resolution), eight financial settlements were adjudicated via the BBRS, and two cases were resolved through conciliation.

The Federation of Small Businesses called the figures “really disappointing” and said those involved should “work fully” to improve the service.

A BBRS spokesman said Small business: “It is important to remember that we are subject to the eligibility criteria set for us by policymakers in response to the Walker Review, as endorsed by the Implementation Steering Group, and we can only look at cases that fall within those set provisions. criteria. The number of outcomes we can deliver depends on the number of qualifying cases we receive, and we continue to encourage anyone with a qualifying complaint to come forward to register with us.

“We do not leave a stone unturned to encourage qualifying customers to register with us and will soon launch campaigns to find both historical and contemporary cases. We appeal to all small and medium-sized businesses with outstanding bank disputes to see if they are eligible for support by using our fast online tool. ”

Further reading

What is the Business Banking Resolution Service (BBRS)?

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