The FCA conducted a review of 11 banks’ collection practices and identified a number of issues, including the fact that lenders were not treating small businesses fairly when they try to agree to a sustainable payment plan. This could be seen in arranging payment plans that are clearly unaffordable based on the information provided by the customer.
The review also found that bank staff do not have the right training to provide effective support to customers and make fair decisions about cases and lenders did not have clear policies to help staff identify and support vulnerable customers meaning these customers may be missing out on the support they need.
Additionally, lenders did not have quality assurance and testing for their processes to ensure that they deliver fair results for consumers meaning problems go undetected.
The FCA has provided feedback to the individual firms it reviewed. However, it wants to see the whole sector take action. It has written to the chairs of all retail banks with small-business customers. The letter told the boards of these banks to ensure that they are meeting the FCA’s expectations and to inform the regulator if they are unable to do so.
Sheldon Mills, the FCA’s executive director for consumers and competition, said people across the country will be affected by the rising cost of living – and this includes small businesses.
“We were disappointed to find repeated instances of these customers not being treated fairly by banks when they’re struggling. We expect the whole sector to act quickly to improve this. We will take action if problems continue,” he said.
