THE co-chairman of an influential group of MPs has warned that victims of banking misconduct could be denied equal status with financial services firms on a new regulatory working group.
Kevin Hollinrake MP said that small business groups and alleged victims are underrepresented on groups that have been established to support a new dispute resolution service implementation steering group (DRS ISG).
Mr Hollinrake, who is the co-chairman of the All Party Parliamentary Group on Fair Business Banking (APPG) said this “inequality of arms” should not become part of any dispute resolution system which aims to level the playing field.
The APPG has accepted a place on UK Finance’s DRS ISG, which aims to implement a compensation scheme for firms who have been mistreated by the banks. It also aims to establish a new resolution mechanism for disputes between businesses and financial institutions.
In a letter to the Chancellor Philip Hammond, Mr Hollinrake said: “It is projected that there will be nine bank analysts compared to the one SME (small and medium-sized enterprise) professional, who will be on the customer and communications workstream and will not be working on the actual design process of the scheme.”
He added: “Resource should be made available so that these professionals can commit equal time and energy to this project as the banks.
“We are concerned that this has not been forthcoming, and the reticence to adequately resource professional representatives is, quite frankly, insulting.”
He added: “We are deeply concerned that any professionals that the APPG or SME Alliance put forward must be vetted, yet the banks are able to put forward whomever they wish.”
The letter added: “Fair remuneration and expenses should be made available for participants who are not remunerated by other means.”
In his letter to Mr Hammond, Mr Hollinrake acknowledges that the working group and DRS IRG are making progress, but he is concerned that trust in the system could be undermined if some elements of the plan are not revised.
Mr Hollinrake had previously said that the APPG’s priority has always been to provide “fair and adequate compensation for the victims of the scandalous behaviour of the banks”.
An HM Treasury spokesperson said: “We know banks need to work hard to restore businesses’ trust. The industry’s work to establish a voluntary service to resolve SME disputes – with vital input from the APPG on Fair Business Banking - is a welcome step to achieving this.
“The move builds on the recent expansion of the Financial Service Ombudsman, which now covers over 99 per cent of UK businesses, helping ensure they can resolve complaints in a fast, free and fair manner.”