Small Business Powers Over Financial Disputes
Advice for Small Companies on Complaining to Financial Institutions
Oct 21, 2009
Some small businesses may at some time feel unfairly treated by bank charges and restrictions and many feel unable to take on such large financial institutions. One report showed that some financial companies turned down all payment protection insurance complaints (Money Mensch: Don’t Be Afraid to Take on the Banks, Martin Lewis, 2009). However, when the complainants took the institutions to a financial ombudsman, every case was ruled in the complainant’s favour.
Complaints on Small Business Banking
Confronting a large financial institution such as a bank, building society or an insurance company might feel a little overwhelming for the small business. However, a free middleman might come in handy for settling disputes between parties. The Financial Ombudsman Service (FOS) is a free service set up by parliament in 2001. It can help small businesses with an annual turnover of up to one million pounds in getting compensation for unfair treatment.
Advice for Small Businesses on How to Treat Financial Disputes
When the small business suspects that unfair treatment has been dealt out by a financial institution, the following will set things in motion:
- Communicate to the party concerned in the first instance
- If this fails, take the complaint further up the line
- Keep all letters of correspondence, names, times and dates of telephone calls
- Give the financial institution a chance to reply with a final response
- If the final response is not forthcoming after eight weeks, the financial ombudsman may be approached.
Approaching the Financial Ombudsman Service
Before approaching the financial ombudsman service, it is a good idea to have the following:
- Details of all account details or policy numbers involved
- A record of dates, names, letters, and other relevant paperwork with a description of the events surrounding the complaint
- The Financial Ombudsman will issue a complaint form, which will require personal details and brief details of the events surrounding the complaint
The financial ombudsman will look at both sides of the story from an impartial viewpoint and come to a conclusion. They will then inform the complainant and the financial institution whether unfair treatment has occurred and what the financial institution should do to put it right. The decision might not always be what the complainant wants to hear, but unlike court proceedings, court fees will not have incurred.
The small business must bear in mind that there is a time limit on when to complain, so it is best to do so as soon as the eight weeks have elapsed without a final response from the financial institution.
Taking the A Financial Dispute to Court
The ombudsman may offer advice on how to settle matters, but if the dispute involves an amount in excess of £100,000, taking it to court might be the action to take. However, the FOS can oversee fair implementation of many bank dealings, such as the mis-selling of endowments, pensions, savings accounts, investments and unfair debt collection procedures.
Advice for Small Businesses on Getting Fair Treatment from Banks
The financial ombudsman offers a confidential service. It must be noted, that the financial ombudsman does not enforce the rules nor do they make the financial institution do as they say. If the small business is unsatisfied with the result, the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) has more powers to enforce the rules and to penalise financial institutions if they are in breach of regulations (Your Complaint and the Ombudsman, FOS, 2009).
 |
 |
 |
 |
 |
