This discussion paper reviews the way in which small and medium sized enterprises (SMEs) that use financial services are treated in our rules.
This discussion paper follows the emergence of a number of issues with the way in which some financial services firms have treated their SME clients. These have prompted questions from various sources, including the Treasury Select Committee (TSC) and the Parliamentary Commission on Banking Standards (PCBS), about whether more small business customers should be able to refer complaints to the ombudsman service. In this paper we acknowledge the high-impact cases the TSC and PCBS focused on but also consider provisions for SMEs throughout our Handbook, not just their access to redress.
Across regulated industries, SMEs have traditionally been treated as having greater self-sufficiency and bargaining power than individual consumers. So they have often been seen by regulators as requiring less assistance, even though their needs, behaviour and expertise are often similar. Our own work has shown that SMEs can experience poor outcomes in a wider range of situations. They can be exposed to risk at the point of purchase due to product complexity, limited choice or poorly managed expectations. When things go wrong, some struggle to navigate the complaints and claims processes or to obtain redress.
In this document we seek evidence and views on whether our rules should provide SMEs with greater protections, including access to the ombudsman service, thus treating them more like individual consumers.
This paper is focused on SMEs as users of financial services. In particular, we want to hear from businesses and self-employed individuals, the firms that provide them with financial services, and their advisers and representatives. The paper should also be of interest to consumer organisations.
We will use responses to this paper, alongside evidence from discussions and roundtables with stakeholders, to consider whether to consult on changing our rules or take other action.
Please send us your comments and any accompanying evidence by 18 March 2016. To submit your evidence, please use the online response form or write to us at the address on page 2 of the Discussion Paper.
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