Business banking disputes: a way forward

Allegations about mis-sold interest rate hedging products or wrongdoing at RBS’s Global Restructuring Group have highlighted that the United Kingdom lacks adequate dispute resolution facilities for small firms to gain redress from the banks. Adam Samuel suggests a way forward from “an unregulated mess”.

Adam Samuel BA LLM DipPFS MCISI FCIArb Certs CII (MP&ER) Barrister and Attorney may be contacted at adamsamuel@aol.com. His book, ‘Complaints and Compensation: a Guide to the Financial Services Market’, is available from his website, www.adamsamuel.com.

The deputy business editor of The Yorkshire Post, Greg Wright, may have triggered a new branch of complaints-handling and even compliance through an interview he did with Andrew Bailey that appeared on 23 January. The Financial Conduct Authority CEO indicated what many on ‘the front line’ have known for a while, namely that the United Kingdom lacks adequate dispute resolution facilities for small firms to gain redress from the banks. The Financial Ombudsman Service, suggested Bailey, was originally designed for individuals and he was “involved… at the moment with Parliament” in having “an adequate complaint resolution mechanism for small firms”. A complicating factor, as Bailey noted, was that many of the issues involved, notably commercial lending, are not regulated by the FCA. He accepted that “small firms have strong doubts” about the effectiveness of various schemes set up in recent times, clearly alluding to the interest rate hedging products set-up.