Who we can help

Limited Company A complained to us about the way its bank handled its recent loan application. As part of our jurisdiction check we had to consider the balance sheet total of Limited Company A.

Its balance sheet as at the last financial year end before the complaint was as follows:

We looked at the total assets (or gross assets) figure. This is typically fixed assets plus current assets, which in this case was £3.06 million, so well within our limit of £5 million. As all our other jurisdictional criteria were satisfied, we were able to consider Limited Company A’s complaint.

Headcount

• The headcount includes full-time, part-time, temporary and seasonal staff. 
• It includes employees, owner-managers, partners and directors engaged in a regular activity in the business, but excludes apprentices and employees on maternal or parental leave. 
• The headcount is measured in terms of full-time equivalent (FTE) people. So anyone who worked full-time during the entire year counts as one FTE. Part-time staff, seasonal workers or those who did not work the full year are converted to FTE based on the number of hours they worked. 
• For example, C Ltd has three full-time employees contracted to 40 hours a week. They also have six part-time employees each doing 10 hours a week. The six part-time employee hours added together make up another 1.5 FTE (6x10 hours = 60 hours = 1.5 FTE). So the business employs 4.5 people for the purposes of the headcount calculation. 

Limited Company B complained to us in April 2020 that its bank unfairly closed its account without notice. The bank told us that  Limited Company B was too big to complain to us as its annual turnover according to its last audited account as at 31 March 2020 was £7.5 million and this was outside our threshold of £6.5 million.

However,  Limited Company B’s financials over the last two preceding years had been as follows:

On further investigation, we found that 2019-20 had been an exceptionally good year for  Limited Company B due to a large one-off government order, which had caused both its staff and turnover to grow. In the previous two years, both its number of staff and turnover were much lower and below our threshold.

As per the two-year rule, we only consider a business too big if it has exceeded the threshold for two consecutive years but that was not the case here. Therefore, we said that  Limited Company B was able to bring its complaint to us.

Limited Company C is a pharmaceutical company, which brought us its complaint about an insurance claim its insurer had refused to pay. At the time it complained to the insurance company, Limited Company C had an annual turnover of £5 million, 25 full-time employees and total assets of £1.5 million.

So, on the face of it, it was a small business under our rules and therefore eligible to complain to us.

However, on further investigation we found that Limited Company C had a 70% shareholding in another company, Limited Company D.

Because Limited Company C had a majority shareholding in Limited Company D, to arrive at the size criteria for our jurisdictional purposes, we had to add the figures of Limited Company D also. Thus:

As the combined turnover was over £6.5 million, Limited Company C was above the threshold and we were unable to consider its complaint. 

Please note this also works the other way. So, for example, if another company had a majority shareholding in Limited Company C, then to arrive at the size criteria, we would need to add the staff headcount and financial data of that company also. 

A proportion of the size of any partner businesses will be added to the size of your business. 

Limited Company E sells soft drinks, including fizzy drinks and fruit juices. It had recently taken out public liability insurance but was concerned that its policy had been mis-sold by its broker. It asked us to review its complaint.

Limited Company E had turnover of £2 million and a balance sheet of £1.8 million. It employed 20 people full time.

Limited Company E is in partnership with Limited Company F and has a 40% stake in Limited Company F. Limited Company F employs 40 people full time. It has a turnover of £4 million and a balance sheet of £10 million. 

So, to calculate the headcount and financial data to assess whether we had jurisdiction to consider the complaint, we needed to add the relevant percentage of data for Limited Company F to that of Limited Company E. So that means:

The combined relevant turnover was £3.6m, which was below the threshold of £6.5m. So that condition was satisfied.

We then needed to check whether at least one of either the staff headcount or the balance sheet total was below our threshold. The data showed that though the total assets were above £5m, the headcount was below 50, so the headcount threshold was also satisfied.

This meant Limited Company E was eligible to bring its complaint to us. 

These calculations are not always straightforward, so please contact us if in any doubt. 

Charity G complained about the time it took its bank to change its mandate. At that time, it had 80 staff, £6 million total assets and an annual income of £5 million.

The charity was able to bring its complaint to us. This is because its annual income was below our threshold of £6.5 million.

Unlike the size criteria for SMEs, the total assets and the staff headcount is irrelevant to consider the eligibility of a charity.

The trustees of Trust H complained to us about an administrative error by the trust’s bank in September 2018.

The trustees complained to the bank about this matter in July 2019 before bringing the complaint to us. At the time they complained to the bank, the trust’s total assets were £6 million, its net assets were £4 million and its annual income was £600,000. 

Our jurisdictional threshold for trusts relates to net asset value – not gross assets (as in the case of small businesses) or annual income.

The net assets of Trust H at the time it complained to the bank were £4 million.

However, the trustees’ complaint was about something that happened before 1 April 2019. This is important as the threshold for our jurisdiction to consider complaints from trusts is different for events after 1 April 2019 from events before. Although our size threshold for trusts is now £5 million, this relates to complaints about events after 1 April 2019. For complaints about events before to 1 April 2019, the threshold is £1 million.

Therefore, Trust H was too large at the time the events took place and we could not consider its complaint.

Deciding when the event being complained about actually occurred isn’t always straightforward. So if in doubt please contact us.

Helen was one of the directors of Limited Company I. In June 2019, the company needed to borrow some money from the bank and Helen signed a guarantee as security for the company’s loan. Within six months, the company ran into financial difficulties and couldn’t repay the loan. The bank demanded  that Helen repay it under her guarantee. She complained that the bank hadn’t acted fairly.

The guarantee agreement in this case was entered on 10 June 2019, which was after the rules changed on 1 April 2019 to include guarantees given regarding loans to a business by a director or shareholder of that business.

So we were able to consider Helen’s complaint.

Parish Council J complained to us that its insurer unfairly rejected its claim regarding its employment insurance cover.

We concluded that, as a public body exercising its duties to deliver a public service, the council wasn’t a micro-enterprise or small business. And there were no other categories of eligible complainant under our current rules that could apply to it. So, we were unable to consider its complaint.  

This does not mean that a parish council could never fulfil the relevant criteria, in particular where it is engaged in economic activity. We consider jurisdiction in each case based on the individual facts and circumstances. So, if in doubt, please contact us.

Golf Club K made two bank transfers to a scammer who it mistakenly believed to be its supplier. It was unhappy that its bank refused to refund the money.

The bank said that the club didn’t fall into any of the categories of eligible complainant under our rules (this is explained in full in the FCA handbook at DISP 2.7.3R), so we could not consider its complaint.

Clubs and societies usually take the form of unincorporated associations. However, to bring a complaint to us they need to meet one of the criteria set out in DISP 2.7.3R. 

An unincorporated association won’t be a consumer as, by definition, it won’t be an individual.  And whether it meets any of the other criteria will depend on its purpose and constitution. To consider this, we may need to look at a copy of its governing documents.

In the case of Golf Club K we reviewed the club’s governing documents and looked closely at what the club did. The club offered membership to the public on payment of an annual fee. The membership came with a set of benefits. In addition, the club offered merchandise to its members and the public for sale. It also let its premises for business meetings and weddings.

We concluded that the club was clearly carrying out economic activities and therefore was eligible to bring its complaint to us as a micro-enterprise or small business, depending on its size. In this instance it was small enough to be considered a micro-enterprise.