More needs to be done to protect small and medium enterprises (SMEs) damaged by misconduct in the banking sector through the inappropriate sale of financial products, Alex Cunningham has declared.
Many SMEs across the country – the true wealth creators within our economy – are struggling to get the financing they need, with schemes such as Project Merlin and Funding for Learning failing to entice banks into lending to small firms and entrepreneurs. And this sorry situation is made even worse by high street banks mis-selling products and then refusing to accept responsibility for their actions.
Attending the “Brolly Day Assembly” in Westminster, the Stockton North Labour MP highlighted the failure of the Financial Conduct Authority and several major high street banks to deliver prompt and equitable compensation under the Review & Redress Scheme to SMEs mis-sold interest rate hedging products, factoring services, fixed rate business loans and Enterprise Finance Guarantees.
While over 95 per cent of sales so far reviewed under the Scheme have been assessed as non-compliant, banks are delaying any refund of payments until consequential losses are calculated – a process that could take years to complete.
“The blatant mistreatment of SMEs by high street banks in such a manner is truly disgraceful. It is extremely worrying that the institutions we entrust to aid our economic recovery are able to get away with acting in such a manner.
“And it is more shocking still that hundreds of businesses across the country continue to suffer due to a failing FCA scheme that was designed to remedy the situation. This is why I support Bully-Banks’ call for urgent actions, and the campaign to change high street banking culture to protect against such conduct reoccurring in the future.”
Jeremy Roe, Chair of Bully Banks said: “The parliamentary support for this campaign has been invaluable in securing redress for thousands of businesses across the UK, each of which has been the victim of mis-selling at the hands of our high street banks. Much more remains to be achieved, but turnout has been extremely encouraging and we look forward to working closely with MPs to resolve the ongoing issues.”