Small businesses must get better protection from problems caused by their banks, a Lancashire business.
Norman Tenray, Chief Executive Officer at Longridge-based OBAS UK, said the impact of the recent IT failures by TSB on small firms highlighted the need for the regulator to do more to support.
Currently the independent Financial Ombudsman Service (FOS) protects consumers, many small businesses will be left to fend for themselves by such issues which are not their own fault.
OBAS UK is the sponsor of the Small Business of the Year category at this year’s Be Inspired Business Awards, the BIBAs, and will chair the category’s judging panel when it meets applicants today (May 15).
Mr Tenray said: “In the case of TSB, the bank has gone some way to cover the costs incurred by small businesses as a result of its IT failure, there are consequential losses which it has yet to resolve and some it cannot resolve.
“The reputational damage an issue like this can cause with customers or suppliers is something which is difficult to quantify, but could be extremely damaging to a small business.
“There will be a small number of firms which will be protected by the FOS but for the rest the small claims court is the only way forward – costing extra time and money to already stretched businesses.
“If any good is to come out of the issues with TSB, it needs to be the immediate extension of the FOS to cover a greater number of businesses and protect those firms which need our support to allow them to grow.”
Presently, the FOS accepts cases to businesses employing fewer than 10 people with annual revenues of less than £2m and plans to extend this to firms with 50 staff and sales of £6.5m – which do not come in to force until later this year.
TSB has said it is “committed to ensuring no customer is left out of pocket” as a result of its issues, but only committed to waiving overdraft fees and interest charges incurred in March and April.
Today, the BIBAs hosts its second day of judging which will see applicants meet its panels for face-to-face interviews which will also see applicants to the Service Business of the Year category face their judges.
All interviews will take place at the Fylde offices of the North & Western Lancashire Chamber of Commerce in Blackpool and conclude on Thursday, May 24.
The shortlists for the awards’ 18 categories will be announced on June 5.