The FOS offers consumers an independent, low cost method of having disputes with financial services providers, including banks, resolved without the need for full scale litigation through the courts.
Phillip Monks, CEO, of Aldermore says that opening the FOS to more businesses will help improve the standards of customer service offered by banks.
Aldermore says giving small businesses an independent route to resolving problems with their banks could even play a small role in healing the fractious relationship between the banking industry and small businesses.
At present the FOS can only deal with a dispute between a business and its financial services provider if the business has an annual turnover of less than €2 million (approximately £1.8 million) and fewer than ten employees.
Aldermore says that this excludes all but micro businesses and that the Government should consider gradually raising this cut off point so that a wider range of businesses can access the FOS service.
Comments Phillip Monks: "If a small business has promised funding pulled or has been missold a product they are very unlikely to pursue their bank through the courts as litigation can be so expensive."
"That leaves the vast majority of SMEs with virtually no practical route to pursue a complaint against a financial services organisation."
"Aldermore has been very careful to build a portfolio of financial products that are very straightforward and transparent. We have also put in place the kinds of processes needed to ensure our customer service is dynamic and responsive."
"We expect this will keep our complaints at their current low level but if there is a complaint that we can't resolve then we think it would be helpful if the FOS were allowed to review that case. I would be surprised if SMEs wouldn't want this from all banks."
"Considering the FOS' small budget they do a brilliant job."
Research by Aldermore shows there was a 119% increase in complaints from SMEs against other UK banks in the last year. 496 complaints were made by SMEs in the year to March 31 2010 by SMEs about bank loans or overdrafts compared to 226 in the previous year (Aldermore had no equivalent SME complaints during that period).
Phillip Monks says that complaints against the financial services sector as a whole are at a record high. The FOS says they received 163,012 complaints in total in the year to March 31 2010 versus 127,471 in the previous year.
Adds Phillip: "Dissatisfaction amongst customers with the providers of financial products is now almost endemic and that really needs to change. At Aldermore we are convinced that this dissatisfaction is because the financial services sector seems hooked on selling ever more complex and ever less transparent products."
"Part of the reason why Aldermore hardly ever gets any complaints is because our customers can understand our products inside and out, there is little room for misunderstanding."
"In too many parts of the financial services sector the products are so overly complex and poorly designed that the salesperson doesn't even know what they are selling."
Aldermore says that at the moment 91% of complaints from businesses about their bank or other financial services provider are resolved by the FOS within 12 months which is faster than for consumer complaints. 81% of consumer complaints are resolved by the FOS within 12 months.
Phillip Monks says that if more cases were to be heard by the FOS then the Government could offer some reciprocity to the financial services sector. For example, by promising to keep the running costs of the FOS index linked.
Adds Phillip Monks: "Banks don't deliberately set out to make mistakes but knowing a customer has the option of going to the FOS will encourage banks to put in place the systems and controls needed to ensure they treat their customers properly."
"Businesses want a cheap, independent and less adversarial way to resolve disputes and the banks want to avoid creating too heavy a burden such as the cancelled "Credit Adjudicator" could have become."
The "Credit Adjudicator" would have heard complaints from SMEs that had been refused loans.
Says Phillip Monks: "We can all work a bit harder to make sure our internal dispute resolution and complaints handling process are as fair and impartial to the customer as possible but at some point customers will just want a third party to look at the problem."
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Nick Mattison or Catherine Sirikanda
Mattison Public Relations
Tel: 020 7645 3636
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