In January 2018, the FCA published a Consultation Paper (CP18/3) proposing that Small and Medium Sized Enterprises (SMEs) with fewer than 50 employees, annual turnover of under £6.5m and an annual balance sheet total of under £5m should be able to access the Financial Ombudsman Service (“FOS”) on the same terms as individual consumers and micro-enterprises. The FCA proposed broadly equivalent eligibility criteria for charities and trusts. The FCA also proposed that personal guarantors of loans to a business they are involved in should also be able to complain to the FOS.
Following consultation, the FCA has made some changes to its approach and in summary, the FCA has:
- relaxed the proposed eligibility criteria for SMEs so that they would only have to meet the turnover test and one of either the headcount or balance sheet total tests, rather than all three tests; and
- allowed the FOS more time to prepare for the changes and allowed itself more time to consider the changes as part of the FCA’s wider consideration of the FOS’s business plan and budget for 2019-20
The FCA expects the changes will mean around 210,000 additional SMEs will have access to the ombudsman service.
The changes to the FOS’s eligibility criteria will come into force on 1 April 2019.
