Tribunal needed for small firms to get justice
Campaigners including the SME Alliance, along with entrepreneurs and MPs are backing a call for a tribunal-style system to be brought into effect. The introduction of this new forum would tackle grievances between desperate businesses and big banks. Celebrity plumber Charlie Mullins, former Dragons’ Den star Hilary Devey and veteran retail entrepreneur Theo Paphitis back the idea, as does Liberal Democrat leader Sir Vince Cable.
This tribunal is a reaction to actions that big banks have taken against smaller businesses in the UK this year.
Portland Stone Holdings is suing Barclays alleging that they conspired to put Stone Firms Limited, its subsidiary, into administration. Barclays are defending their business methods and claim that Stone Firms Limited was only put it into administration after it was unable to pay a debt to HMRC.
Furthermore, police are looking into the treatment of customers by a division of Royal Bank of Scotland that was set up to help companies in trouble. The company, GRG was tasked with helping small businesses, but it has been accused of mistreatment by some customers and a member of Parliament. A BBC spokesman has confirmed that while Officers in Scotland are conducting inquiries into the GRG unit, a formal investigation has yet to be opened.
The UK Financial Conduct Authority’s has conducted an independent review of the case. The financial regulator found there was “widespread” mistreatment of customers, but it did not force them into bankruptcy in order to profit. In the report released Monday the FCA found that the main failures of the company was in its communications with customers. This was through inadequate explanations of pricing, badly handled customers complaints and unchecked valuations by staff.
The FCA Chief Executive Andrew Bailey said that the report has highlighted the lack in regulation in commercial lending and called on the government to expand the operation of the FCA accordingly. The regulator was set up in 2013 to make sure banks treat their customers fairly, and there simply isn’t a proper dispute resolution service to tackle all issues. This new tribunal may be a step in the right direction to help customers and small businesses have their say.
James Salmon for the Credit Protection Association has said “It is vital for the economy that small businesses are allowed to thrive and grow. Many businesses with excellent prospects and great ideas need to be helped through difficult periods rather than pushed into insolvency because it is more profitable for the bank to do so. These insolvencies leave unsecured creditors, employees and entrepreneurs high and dry.”
“Justice should be done. We need the victims to be compensated and strengthened regulation and dispute resolution to prevent such practices in the future”
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