FCA calls for input on SME access to FOS

The FCA has launched a call for input to ascertain whether the thresholds for SMEs to be able to refer complaints to the FOS remain appropriate. The FCA’s policy objective is to provide access to the Ombudsman Service to SMEs likely to have insufficient resources to resolve disputes with financial services firms through the legal system.

Current thresholds

To be eligible to refer a complaint to the Ombudsman Service the complainant needs to have been a micro-enterprise or small business at the time the complaint was made to the firm.

A micro-enterprise is an enterprise that employs fewer than 10 persons and has turnover or annual balance sheet that does not exceed €2 million.

A small business is defined as an enterprise which:

a. is not a micro-enterprise;
b. has an annual turnover of less than £6.5 million (or its equivalent in any other currency); and

i. employs fewer than 50 persons; or
ii. has a balance sheet total of less than £5 million (or its equivalent in any other currency).

Since FCA changed its rules to make FOS available to a greater number of SMEs in April 2019 – making it available to small businesses as well as micro-enterprises, FOS has received just under 5,000 complaints from newly eligible SMEs. Since then, the BBRS also set up in 2021 to resolve disputes for SMEs with a turnover up to £10m which are too big for FOS, but this service only attracted 7 participating banks and is closing at the end of the year.

Responses to the call for input may be provided using the survey link by 28 April 2023.


Jasmine Zacher