Eligible small and medium-sized enterprises (SMEs) with a business banking complaint have been urged to register ahead of the Business Banking Resolution Service (BBRS) closing to new registrations on 13 December.
SMEs which think they may have an unresolved eligible complaint against their bank should contact the BBRS to see if it can help, according to a new statement.
The BBRS, which is wholly funded by its seven participating banks – Barclays, Danske Bank, HSBC UK, Lloyds Banking Group, NatWest Group, Santander UK and Virgin Money – was originally intended to close in 2023, but was given a temporary extension to operate beyond this deadline.
Since its inception in 2021, the BBRS has encouraged eligible SMEs to register their complaints, with more than £2m of financial redress made as a result of its 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, which 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 therefore 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), which did not recommend expanding the remit of the Financial Ombudsman Service for Business, which currently accepts business banking complaints for SMEs with a turnover up to £6.5m.
In their report from October 2023, the FCA wrote that the low numbers of complaints referred under the [BBRS] scheme suggest to us that there is not a strong demand from larger SMEs for access to ADR [Alternative Dispute Resolution].
Mark Grimshaw, chief executive 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 Financial Ombudsman Service.
“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 shows 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. “
He added: “We would like to encourage all eligible SMEs to come forward ahead of 13 December 2024 to register their business banking complaint with us.”
The key eligibility criteria for the BBRS include:
- A business turnover of less than £10m at the time it complained to the bank and above the threshold of £6.5m – below this threshold would normally qualify for the Financial Ombudsman Service.
- The issue must relate to a business banking complaint against one of the seven participating banks.
- The incident complained about must have taken place on or after 1 April 2019.
- The complaint must not have been through litigation or have been settled already.
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