The Financial Ombudsman Service has received more than 3,500 complaints relating to COVID-19, including wide-ranging issues raised from SMEs and consumers over commercial lending, business protection insurance, and personal finance.
It warned that firms “must do more” to make sure both consumers and SMEs were treated fairly during what for many have been challenging times. Following the introduction of the national lockdown in March 2020, the ombudsman heard from SMEs complaining that they did not have cover under their business interruption insurance policy to make a successful claim. These issues have been far-reaching and the complexities involved in some of the cases prompted the FCA to take a test case to the courts. The outcome of the test case is likely to inform how the ombudsman considers relevant complaints.
A package of emergency support for businesses was introduced on 17 March 2020, including the Coronavirus Business Interruption Loan Scheme (CBILS) for SMEs. On 27 April, a further business lending scheme was announced, the Bounce Back Loan Scheme (BBLS), targeted at sole traders and small firms. From the middle of May onwards, the ombudsman started to see complaints about financial business in relation to these schemes. Some SMEs complained of delays in processing their application or in releasing the funds, while others said their applications for these loans had been declined – especially if they were new customers of the bank.
The ombudsman expects to see a continued increase in the level of complaints it will be handling in the months to come. It said: “The fact that we will only get involved in a complaint after a business has had a chance to resolve the situation, means it’s likely we’ll continue to see cases related to the initial impact of COVID-19 arising for some time to come.
“Looking forward, it’s likely the nature of COVID-19-related complaints we see will change. The immediate insurance issues are likely to ease up, but we may start to see more people facing financial difficulties, especially as deferral arrangements come to an end.”
Latest News
-
IUA to examine role of insurance in carbon reduction
-
BSI: Businesses don’t understand implications of net zero
-
HSE to increase COVID-secure spot checks
-
VIEW: Trade credit weaknesses remain despite government scheme
-
Government moves to increase pressure on late payers
-
2021 Predictions: Cyber carriers will become more selective
Are property insurers ready for timber
The Structural Timber Association is gearing up to help all stakeholders in the construction supply chain to fully appreciate the advantages of building in timber, how to deliver such projects and most importantly to understand and manage the risks.
The changing face of BC and WAR
The working environment has changed quite dramatically for many over the last six months. With social distancing and the rise of homeworking, it is not just how businesses operate that has changed, but also how they recover. In this podcast we discuss some of the challenges created by the quick shift to home working, why the office may not have seen its last days and how the current environment can impact the ability of a business to recover.
© 2019 Perspective Publishing Privacy & Cookies
Recent Stories