Blog: Helping small businesses with life-changing financial disputes

Date published: 28 October 2020 SME Insights

Caroline Wayman, Chief Executive and Chief Ombudsman, explains why our experience of having resolved millions of complaints over the last 20 years, combined with the legal powers we have to put things right, means we’re well-placed to provide fair and impartial resolutions to what can often be critical financial disputes faced by small businesses.

Thank you – you were brilliant and without you I guess we would have still been struggling. Thank you for all your hard work and time on this.

Small business owner, Scaffolding company

Making a positive difference

When I hear feedback like this, received from one of the small businesses we’ve helped recently, about the impact we’ve had on their life, it makes me proud that we’re able to make such a difference. As an ombudsman service, we’re here for people who haven’t been able to resolve their complaints with financial businesses directly.

And while we’ve always been able to look at complaints from individuals and the smallest businesses, in April 2019 our jurisdiction was extended, giving us official powers to look into complaints from more small businesses and small to medium-sized enterprises (SMEs).

We now offer a dedicated dispute resolution service that over 99% of small businesses are eligible to use and, since the outbreak of Covid-19, we’ve seen many more small businesses impacted by the pandemic come to us for help as the nature and extent of complaints multiply. Our role is as important now as it’s ever been, so one of our aims for this year and beyond is that the people who are eligible to use our service – whether as individual consumers or small businesses – are aware of us and understand how we can help.

How we helped Claire 

Claire, a guest house owner, contacted us because she was unhappy with her bank. She told us that, with the sudden and total loss of all her revenue during lockdown, she couldn’t afford to pay the mortgage on the property, in which she also lived. She’d asked her bank for a mortgage holiday. Claire said she knew other businesses in the area who had been granted payment holidays. However, her bank told her she wasn’t eligible and offered a loan instead. Unhappy with this outcome, Claire contacted us.

When we spoke to the bank, it explained Claire hadn’t yet made a formal complaint. But it agreed to work with us to address her concerns given the urgency of the circumstances. The bank explained its position – which was that mortgage holidays were intended for residential properties, while commercial properties and businesses were eligible for different government schemes.

We explained that eligibility for mortgage payment holidays wasn’t limited to residential customers, which meant Claire might be eligible , depending on her other circumstances. The bank apologised, explaining the challenges they’d had in adapting to the new FCA guidance at short notice. They said they would change their approach from now on.

We thought this a fair and reasonable outcome – meaning that not only was Claire’s problem resolved quickly, but further complaints arising from the same error would also be prevented.

Preventing a difficult situation from becoming more unfair

For me, this encapsulates what we do and how we help. We were able to step in and use our experience, knowledge and judgement to prevent a difficult situation from becoming rapidly more unfair. And, as an informal alternative to the courts, we aim, wherever we can, to resolve things informally at the earliest possible stage, before things go on to become entrenched. We’re free to use and coming to us is much more straightforward than entering into a legal process. However, we also know that where it’s not possible to resolve things this way, our ability to issue a decision can bring finality to a situation that might have been going on for some time.

Using our knowledge and experience

In the complaints we’re seeing related to Covid-19, we’ve been applying our well-established approach to new circumstances to help get answers to the individuals and small businesses affected. Where needed, we’ve been making decisions on what fairness looks like for issues we’ve not seen before.  

Our investigators are experienced in helping to resolve complaints from small businesses. And they’re supported in their casework by our ombudsmen who have the power to make final decisions in cases we can’t resolve informally. We also engage regularly with stakeholders with an interest and expertise in the SME sector. For example, our SME advisory group, which is made up of representatives from small businesses, trade bodies and financial services, provides a forum where we share our collective insight, highlighting the concerns of small businesses and the challenges they face.

Through our experience, we understand that a financial complaint can have a huge impact, especially for small businesses, so it’s really important for them to have access to a way of resolving complaints that isn’t a burden on their time and resources. I know it can be particularly difficult for small businesses while they wait for decisions, so we’re working hard to give them answers that provide more certainty over where they stand, that help them move on, and ultimately help them to focus on what’s important to them and their customers. I’m proud that we’re able to make a difference – and I know that small businesses are increasingly relying on us to do so.

The Financial Ombudsman Service for small businesses

The Financial Ombudsman Service for small businesses can help small businesses with complaints about financial services and products. You can find out more on our Financial Ombudsman Service for small businesses website.