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Business Banking Resolution Service To Open In November

Posted 3 months ago

Business Banking Resolution Service To Open In November
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The Business Banking Resolution Service (BBRS) will now start to resolve disputes between businesses and participating banks from the middle of November, it has been announced.

Designed to settle arguments between banks and dissatisfied SME borrowers, the resolution service has been established in accordance with a voluntary commitment made by the banking and finance industry in response to the Simon Walker Review on the small business complaints landscape, and means that businesses will no longer have to resort to expensive legal action.  

To begin with, the Business Banking Resolution Service will only be open to larger SMEs who have a turnover that exceeds £6.5m a year and with assets of £7.5m or over. 

As a result of pressure from MPs, including the All-Party Parliamentary Group on Fair Business Banking, a working group with representatives from the Federation of Small Business and other stakeholders, set out plans for an impartial ombudsman. 

BBRS chairman Lewis Shand Smith says that between them the BBRS and FOS will cover more than 90% of small businesses. 

Shand Smith said: “This is a service that didn’t exist before. It’s there to support SMEs and give you confidence to take out a loan. It redresses the inequality of arms even between a fairly large business and the banks. There’s a safety net here that wasn’t there before.

“If something goes wrong, you don’t have to go through litigation to get things right. Banks will be bound by the BBRS decision. It takes the risk away, it takes the cost away, and it taken the stress of litigation away. It will be a far faster process than having to go through the civil courts.”

Commenting on the news, CEO of Nextfin, Sacha Bright, said: “I welcome this news with open arms. However, why in 2007, did the Financial Sector Conduct Authority (FSCA) and Financial Services Authority (FCA) not step in when banks began to repossess business assets simply because they had eroded their own assets through, what we have now come to learn, were terrible business practises?

“Since the Financial Crash of 2007, the FSA has been renamed the Financial Conduct Authority, and senior banking executives as well as the industry itself can be liable for misconduct. One of the key principles here is that banks must act with integrity and treat their customers fairly. I hope that the BBRS will set a precedent and truly protect SMEs, of which are the lifeblood of the UK economy. 

Author: Sacha Bright & Oliver Murphy

Disclaimer

To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed. Nextfin is not liable for any damages arising from the use of or inability to use this site or any material contained in it, or from any action taken as a result of using the site.  



Tagged: sme entrepreneur news business alternative finance banking



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