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UK regulator extends financial ombudsman service access to more SMEs

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UK regulator extends financial ombudsman service access to more SMEs

The U.K.'s Financial Conduct Authority published "near-final" rules Oct. 16 which amend the criteria for access to the Financial Ombudsman Service for small and medium-sized enterprises, allowing a wider number of SMEs to seek redress.

Companies, charities and trusts with an annual turnover of £6.5 million or less, and fewer than 50 staff or an annual balance sheet below £5 million, will be able to raise unresolved disputes with the ombudsman service.

The new rules enable 210,000 additional SMEs to access the ombudsman service and raise complaints, the regulator said. SMEs only have to meet the turnover test and one of either the headcount test or the balance sheet test, instead of all three. Currently businesses with 10 or more employees and annual turnover or annual balance sheet over €2 million cannot refer complaints to the ombudsman.

The FCA expects the final rules to come into effect April 1, 2019.

The watchdog also published a consultation on raising the amount of compensation the ombudsman can order firms to pay out to £350,000 from £150,000.