New road to redress opens for small firms: Complaints against banks may get easier, say Vivien Goldsmith and Maria Scott
Saturday 05 December 1992
At present, limited companies are not eligible to have their problems considered by the Ombudsman, although sole traders and partnerships can. Also, the Ombudsman is unable to deal with claims involving sums of more than pounds 100,000.
If limited companies cannot resolve their difficulties with the bank, they face hefty legal bills to pursue their complaints. The lack of a cheap route to redress for small businesses is one of the main complaints of Safe (Struggle Against Financial Exploitation), a bank consumer group launched last month.
This week the Banking Ombudsman, Laurence Shurman, said he believed there was now a real possibility that his remit would be widened to include complaints from limited companies.
He added that his office's resources and staff would have to be increased substantially to cope with the extra workload.
Chris Brown and Carolyn Rothwell, who run a fledgling book publishing company, are typical of the sort of people who might want to take their problem to the Ombudsman but are currently barred from doing so.
They were attracted to National Westminster Bank when they set up their business, Take That, earlier this year, publishing humour books and selling by mail order.
The bank was offering a year's free banking to small businesses that stayed in credit. Mr Brown noticed a clause in the documents that said the free banking perk would be scrapped if the business paid in a large number of cheques.
He says he questioned the bank about its definition of a large number of cheques, and was told that he did not need to worry.
'They said it would only affect large businesses.'
Take That publishes inexpensive humour books and despite the recession has been doing quite well with titles like The Hangover Handbook and Not Madonna's Guide to Sex. The company has paid 580 cheques into its NatWest account in five months.
Take That has now received a letter from NatWest warning that charges would be levied on the account from 19 December.
The charge was 70p per pounds 100 of debits and another pounds 6 a quarter.
Mr Brown and Miss Rothwell feel they are being penalised for their success. They also feel misled.
Ms Rothwell complains: 'I know the bank is not there to be altruistic. But they are supposed to help businesses grow. This does not make sense.'
NatWest's explanation of the criteria for stripping new business customers of free banking was not exactly illuminating.
In a written statement the bank said: 'The volume of transmission activity above which our basic tariff is no longer appropriate depends on the combination of cheques and credits issued, cheques for collection and cash passing through the account.
'An estimate of these volumes is normally sought from new customers so that appropriate rates can be quoted at the outset.'
Customers were given a month's notice of impending charges and were invited to discuss them.
Mr Brown is not taking up the invitation as he has since been offered a better deal by Midland Bank.
Simon Read: The point of having protection insurance? The right cover can help reduce your financial concerns at a time of extreme worry
19 December 2014 07:30 PM
In May Nicola Groves got a massive shock. The 45-year-old mother of two was told, bluntly, that she had breast cancer. "When I heard the words, 'You do have breast cancer and you are going to lose your breast', I felt as if time stood still," she says.
19 December 2014 07:30 PM
It's that time again when the media looks back over the past year and forward to the next. I am reminded of an old film, The Day the Earth Caught Fire (1961). Near the end of the film a newspaper prints two headlines – which one it uses will depend on whether the world is saved or doomed.
12 December 2014 05:42 PM
The supermarket banks have always excelled at offering simple, no nonsense products, and savings accounts is another area in which they fare well
12 December 2014 06:17 PM
The sun is shining on people who struggle to heat their homes and it’s thanks to a sense of community
12 December 2014 06:23 PM
Struggling people need help, understanding and forbearance, not ill-thought-out pronouncements
12 December 2014 06:20 PM
You won’t find me bashing the banks for the sake of it, but sadly they’ve deserved all the criticism that’s been sent their way in recent years
12 December 2014 06:02 PM
Gillian Guy, chief executive of Citizens Advice: 'The injustice of shock bills for crime victims must end. The Government must stand up for consumers and cap bills from lost or stolen phones at £50'
12 December 2014 05:57 PM
Stirring the pot: the Indian Government’s reforms of labour rules offer hope of a brighter future for businesses
12 December 2014 05:53 PM
Knight of the road, look out: you’ve got a new rival
06 December 2014 12:00 AM
Simon Read: The Chancellor has stamped on an unfair tax. But will the delight of homebuyers mean misery for others?
06 December 2014 12:00 AM
Were you surprised by the sudden reform of the rules for stamp duty on property purchases? I certainly was. I've been calling for ages for a change in the tax to make it more fair – and, at a stroke, George Osborne did just that on Wednesday in his Autumn Statement.
29 November 2014 12:00 AM
21 November 2014 04:33 PM
With some people are weighing up whether they will be better off cashing in their final salary pension next spring, Samantha Downes asks the experts
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