The Financial Ombudsman Service for small businesses has received more than 4,800 new cases from businesses so far this financial year, new figures have revealed.
Today’s data, which covers the period from the beginning of April to the end of November 2024, demonstrates the many challenges firms may face when dealing with their financial providers.
The Financial Ombudsman, which is free for consumers and accessible to 99% of small businesses in the UK, often hears from firms across a wide variety of industries including farming, hospitality and retailing, as well as traders such as plumbers, electricians and hairdressers.
Fraud and scams remain the most common issue raised by these businesses, with over 1,000 complaints received in this category so far this financial year. This marks a significant rise compared to the same period last year, when around 600 fraud-related complaints were submitted.
Just under half of these latest fraud and scam complaints were in relation to authorised push payment (APP) scams. These are cases where people use an online bank transfer to inadvertently pass money to a fraudster.
Often fraudsters are tricking businesses through a host of sophisticated scams, such as impersonating the business’s bank, intercepting and amending invoice details, or impersonating a director.
James Dipple-Johnstone, Deputy Chief Ombudsman at the Financial Ombudsman Service, said:
Fraud and scams are a growing problem for businesses, with increasingly sophisticated tactics being used to exploit vulnerabilities.
While in many situations we find that financial providers have acted fairly, there are also times when we believe more could have been done to protect businesses.
If a business feels dissatisfied with how their complaint has been handled by their bank or provider, it is straight-forward for them to bring their case to us for free.”
Beyond fraud, we have received over 900 complaints from businesses about their financial provider’s administration and customer service, including delayed letters and poor service-impacting operations. It has also heard from firms who were unhappy that their insurer declined their commercial motor and property insurance claims.
Between April and November 2024, we received around 140 complaints from charities, with administration and customer service topping their list of grievances.
Mr Dipple-Johnstone added:
Whether it’s a small shop, a family-run farm, or a tradesperson just starting out, we are dedicated to supporting businesses throughout their financial disputes.
Our service is impartial and easy to use – we're here to listen and make sure both businesses and their financial providers get the fair treatment they deserve.”
Looking ahead, we are committed to continuing to improve upon its service for businesses. Alongside the Financial Conduct Authority (FCA), it recently launched a joint Call for Input to seek views on how to make the redress system fit for the future and give businesses the stability they need to invest, innovate, and drive sustainable economic growth. The Call for Input runs until 30 January 2025.
We are also currently consulting on our Plans and Budget for the next financial year (PDF 881KB). In 2025/26 the organisation has predicted it will resolve around 270,000 cases and will further build on its ongoing transformation – creating an even more flexible service, investing in new technologies and resolving cases faster. The consultation is open until 29 January 2025.
All data referenced in this press release is unpublished.
The Financial Ombudsman Service was set up by Parliament to resolve individual complaints between financial businesses and their customers on a fair and reasonable basis, as a free alternative to the courts. It can look into problems involving most types of money matters. It is committed to sharing insight and experience to encourage fairness and confidence in financial services.
To support our work, we previously established an SME advisory group, made up of experts who can bring a unique perspective of the SME landscape. The advisory group includes representatives from small businesses, trade bodies and financial services, providing useful insight and support, highlighting the concerns of small businesses and the challenges they face.
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