The Financial Conduct Authority (FCA) has written to all Chairs of retail banks with SME customers to urge action on fair treatment of the SMEs during collections and recoveries, in light of the rising cost of living affecting both consumers and small businesses.
The BVRLA recognises that this communication is aimed at retail banks with regulated SME lending, however, it is applicable to all regulated firms offering lending to small businesses.
The FCA found several instances of poor practices in customer services. As a result, it is urging the whole sector to take action. Where borrowers are treated as if they have a regulated credit agreement, either by requirement or voluntarily, the FCA states that firms should be able to demonstrate they are meeting a comprehensive list of standards.
Later this year, the FCA will finalise any rules in relation to the new Consumer Duty, but it is not waiting for the Duty to come in before it acts to improve consumer outcomes.
