Victims of 'terrible injustice' in danger of being excluded from banking resolution service, says MP

A service which aims to protect small firms from banking misconduct is in danger of making a fundamental error by excluding complainants who have clear grounds for believing they have suffered a terrible injustice, according to a Yorkshire MP.

Kevin Hollinrake MP
Kevin Hollinrake MP

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>Why we need a regulatory revolution>Complaints over signature forgeries must be investigatedKevin Hollinrake MP, the chairman of the All-Party Parliamentary Group on Fair Business Banking, has praised the work being carried out to create a “fair and robust” dispute resolution service.

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But he also called for an independent process to be built into a planned Business Banking Resolution Service (BBRS) for individuals who wanted to have their complaints looked at again.

In a letter to Lewis Shand Smith, the chairman of the Business Banking Resolution Service Implementation Steering Group, Mr Hollinrake added: “It would be a fundamental error to exclude complainants that have clear grounds to believe that they have been the victim of a terrible injustice.

“Indeed it would risk undermining a principle premise of the scheme, the restoration of trust between SMEs (small and medium-sized enterprises) and banks.”

A new dispute resolution service is in the process of being established for eligible small and medium sized businesses that have unresolved complaints with the banks.

The BBRS is being established in response to concerns that regulators have failed to take tough action against bankers who have mistreated their SME customers.

In his letter, which has also been sent to Andrew Bailey, the chief executive of the Financial Conduct Authority, Mr Hollinrake said: “We are pleased with the progress that has been made in the establishment of the BBRS. We are confident that the BBRS can be a groundbreaking scheme that offers robust and fair dispute resolution for larger SMEs in the future and unresolved historic complaints since 2001.

He added: “Our principle remaining concerns arise from our analysis of the cases that have been brought to the APPG, that shows that 85 per cent of the cases will be excluded from accessing the BBRS.”

Those excluded include cases that have been subjected to an IRHP (interest rate hedging product) review and all cases with non-participating organisations, such as Cerberus, Mr Hollinrake’s letter states.

Mr Hollinrake said he was reiterating the APPG’s calls for a fair, impartial and independent process to be built into the BBRS to allow complainants to access the backward-looking scheme, regardless of whether they are formally ineligible, if the BBRS believes they have a justifiable reason for having their case re-examined.

Mr Hollinrake said he was not calling for a wholesale re-opening of cases that have already been through past reviews. But he said it was vital to have a team within the BBRS to determine whether complaints should be looked at again.

He added: “Neither the banks nor the APPG can be arbiters of the merits of a case.”