Yorkshire MP Kevin Hollinrake seeks Parliamentary debate to outline concerns over new business banking resolution service

A YORKSHIRE MP has described a scheme which has been set up to gain justice for small business owner who have been mistreated by their banks as a shambles.

Kevin Hollinrake MP, who is the co-chairman of the All Party Parliamentary Group on Fair Business Banking, said he was seeking a debate in Parliament to highlight the problems faced by business owners who are pursuing legitimate grievances against the banks.

He made the comments after the new Business Banking Resolution Service (BBRS) confirmed that just one complainant has gained compensation since its formation on 15 February this year.

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The BBRS is a non-profit organisation set up to resolve disputes between eligible larger SMEs and participating banks. As of 31 August 2021, the BBRS had handled 626 registered cases, with 338 cases currently going through the BBRS process.

Kevin Hollinrake said: “Quite frankly, the scheme is currently a shambles and a complete embarrassment to UK Finance and the seven member banks who designed it. The APPG warned them all in writing in 2018 that the eligibility criteria would exclude at least 85% of complainants and that’s proven to be the case."

Of the 626 cases, 255 have “completed their journey”. Of these, the vast majority (247 cases) were closed due to administrative factors. As of 31 August only 33 cases were undergoing a formal eligibility assessment. There have so far been eight determinations, which had a range of outcomes.

A spokesman said: “We can’t report on the outcomes of these yet as they are still ‘open’, subject to appeal, but one case has closed and its determination resulted in a financial award for the customer.”

Mr Hollinrake said: “Quite frankly, the scheme is currently a shambles and a complete embarrassment to UK Finance and the seven member banks who designed it.

“The APPG warned them all in writing in 2018 that the eligibility criteria would exclude at least 85% of complainants and that’s proven to be the case.

“We wrote to the Chancellor in August of this year setting out our continued concerns and are seeking a debate in Parliament to further highlight these and ask him to use whatever influence he has to make sure these issues are addressed.”

A spokesman for UK Finance said: “The BBRS is delivering a fair and transparent dispute resolution service in line with the banking and finance industry’s commitment and with the involvement of external stakeholders including business representatives. With the creation of the BBRS, 99 per cent of small businesses now have access to this new service or the Financial Ombudsman Service.”

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Chris Wilford, Head of Financial Services policy at the CBI, said: “The BBRS is starting to make an impact and has an important role in rebuilding trust between banks and their customers at this crucial time for the UK economy.

"Lenders played a vital role throughout the coronavirus pandemic, with nearly £80 billion of emergency government-backed loans providing businesses with critical cash flow support, many of whom had never borrowed before. It is important as we look to the recovery we deal with the legacies of past to ensure we have a firm foundation for growth. The CBI was part of the steering group which set up the BBRS reflecting the importance of this issue to our members and continues to work with all concerned to move the BBRS forward.”

Dirk Paterson, the Customer Director at the BBRS, said the BBRS had been established to provide SMEs (small and medium-sized enterprises) with an independent dispute resolution service to address business banking complaints.

He added: “As we are still a young organisation it is difficult to draw definitive conclusions from our data. Our focus for the time being remains on raising awareness of our services.”

"It’s vital that SMEs know we are here to help with current or historical business banking complaints. Business owners should know that we could award up to £350,000 for historical cases and £600,000 for contemporary cases, and more in suitable cases so they should check if they are eligible for the scheme.”

The BBRS is fully independent and free to use. The process resolves disputes based on what is fair and reasonable for each case, the BBRS said.

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