The Federation of Small Businesses (FSB) has welcomed the support of Ed Miliband MP for small firms that believe they have been mis-sold complex financial products, backing the FSB’s call for a moratorium on payments and an independent scheme.
With only two days remaining for the FSA’s pilot redress scheme, the FSB remains concerned that the banks which sold the products will be the ones to decide if they were mis-sold to small firms. Coupled with this, the FSB also wants a moratorium on swaps payments to prevent more firms going to the wall.
The FSB has written to the Chancellor, George Osborne MP, detailing its concerns about the lack of transparency in the current redress system which is being piloted by the FSA. The business organisation has called for a system which is run independently of the banks to ensure each business is treated fairly and with a consistent approach.
In an interview with the Sunday Telegraph, published 22 October, the Leader of the Opposition said that he was to call for a meeting to tell the FSA to act faster on mis-sold swaps.
Ted Salmon, FSB North East Regional Chairman, said:
“So far small firms have had to wait almost four months for any redress since the FSA made its initial ruling that some businesses were mis-sold products. During this time, they’ve had to continue to meet payments and many have gone to the wall. We want to see a moratorium in place – especially if this is to drag on – and think that an independent scheme would have made quicker decisions.
“The FSA is approaching the end of its pilot scheme, but we believe it isn’t too late to change tack. Small firms currently have little confidence in the banks. To ask the bank that mis-sold the products in the first place to judge if it was fair will be met with disbelief. With estimates that around 40,000 businesses could be affected, it is time to take this out of the hands of the banks and put a fully independent system in place.”