SMEs With a Business Banking Complaint Urged to Register Ahead of Scheme Closure

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Eligible SMEs with a business banking complaint have been urged to register their complaint ahead of the Business Banking Resolution Service (BBRS) closing to new registrations.

SMEs who think they may have an unresolved eligible complaint against their bank should contact the BBRS to see if it can help.

The BBRS, which is wholly funded by its seven participating banks – Barclays Bank, Danske Bank, HSBC UK, Lloyds Banking Group, NatWest Group, Santander UK plc, Virgin Money – was originally intended to close in 2023 but was given a temporary extension to operate beyond this deadline. It will now close at midnight on 13 December 2024.

More than £2 million of financial redress has been made as a result of BBRS intervention. Many cases have had non-monetary resolutions such as changes in loan terms, adjustments to debt recovery arrangements or interest rates, and adjustments to or cancellations of personal guarantees.

Despite these efforts, the BBRS has seen much lower case numbers than originally forecast at its inception. Independent research from Bayes Business School, commissioned by the BBRS in 2021 to investigate the low caseload, concluded that there were only 1,600 possible cases in scope for the BBRS.

Further independent research commissioned by the BBRS and conducted through Public First, who spoke to 522 senior SME decision makers within the BBRS’ remit, found 86% were satisfied or very satisfied with their banks.

The evidence, data and current case volume suggest the customer base anticipated for the BBRS is not there and that the demand is insufficient for the BBRS to operate on a permanent basis.

The decision to close the contemporary scheme follows a report by the Financial Conduct Authority (FCA). The FCA’s report did not recommend expanding the remit of the Financial Ombudsman Service (FOS) for Business, which currently accepts business banking complaints for SMEs with a turnover up to £6.5 million. In their report from October 2023 the FCA wrote: “The low numbers of complaints referred under the [BBRS’] contemporary scheme suggest to us that there is not a strong demand from larger SMEs for access to ADR [Alternative Dispute Resolution]. The BBRS has carried out large-scale advertising campaigns to encourage case registrations, so the lack of demand is unlikely to be due to a lack of awareness of the service.”

Mark Grimshaw, CEO of the BBRS said:

“The BBRS was put in place to provide a business banking resolution option for a small number of SMEs that are currently outside the remit of the FOS. Within that small market, we have been able to achieve valuable outcomes for SMEs, both monetary and non-monetary, which simply wouldn’t have happened without the existence of the BBRS.

“The BBRS has left no stone unturned to encourage as many eligible SMEs to come forward to use our services but despite those efforts we have only seen a fraction of the cases that were predicted. Our research, insights and case data show that the market for the BBRS, within the eligibility criteria it was given at its inception, simply doesn’t exist and we acknowledge the decision of the funding banks to close our contemporary scheme.

“We would like to encourage all eligible SMEs to come forward ahead of 13 December 2024 to register their business banking complaint with us.”

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