Regulation and Business Customers

We pointed out in an article in the Briefing last summer that the extent to which there should be any regulation of transactions with business customers has been a matter of hot debate in the asset finance industry going back decades, and we recalled that when the Consumer Credit Act 1974 first came into full effect in 1985 there was much discussion about future reforms excluding business customers altogether.

Of course in recent years the direction of travel has been in the opposite direction, and in addition to the ambitious plans for long-term reform announced last year by HM Treasury we were interested to note a recent discussion at a meeting of the House of Commons Treasury Committee which resulted in a letter from the head of the Financial Ombudsman Service (“FOS”) to the FCA listing areas where the FOS’s jurisdiction does not currently permit it to consider complaints relating to small businesses.

The first gap identified in the letter relates to “complaints relating to commercial hiring and leasing.”

The FOS states that although such gaps affect relatively few cases each year, the FOS is keen to work with the FCA to address them to ensure that its jurisdiction is “as clear and consistent as possible”.

This appears to be a clear indication that asset financiers are likely to see further engagement with both the FCA and FOS going forward, irrespective of the ultimate outcome of HM Treasury’s long-term review of the Consumer Credit regime.

Contact our Asset Finance team.