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© The Campaign for Regulation of Asset Based Finance. All views expressed are the opinion of the campaign except where specifically stated.

This campaign is not supported by or linked in any way to the asset based finance industry.

The Campaign for Regulation of Asset Based Finance

We are campaigning for:

• A £5bn Clawback Tax from the asset based finance industry on their income that should have gone to HMRC when companies go into administration;
• The regulation of the industry;
• The appointment by Parliament of an independent ombudsman;
• The separation of the industry & the administrators they appoint; and
• A comprehensive review of the asset based finance industry.

The £260bn factoring & invoice discounting industry lends to business, safeguarding their investment as secured creditors against their client’s invoices.  The industry acts within the confines of the Enterprise Act 2002 which was created to rescue viable companies through administration and allow the finance industry to fund business through floating or fixed charges secured against invoices or assets.  

Unfortunately, when the act was written, the unacceptable actions of some of the companies of this unregulated industry and the substantial profits that could be made out of termination and collection fees could not have been foreseen.  The Asset Based Finance industry is neither regulated externally or by itself, which cannot be allowed to continue.

The Financial Services Ombudsman, which polices banks and financial services firms that are regulated by the Financial Services Authority, has no control over Asset Based Finance. These banks and companies are not regulated by the FSA unless they sign up voluntarily.

The affect is that ombudsman, the FSA and the Office of Fair Trading; all have no power to intervene in disputes between the companies and their clients, both exiting and former.  The industry is effectively covered by the Sales of Goods Act.

We have already made a submission to the Parliamentary Commission on Banking Standards and we welcome the announcement by the Government that it is investigating “abuses” of the administration process by invoice finance providers, following an investigation by The Telegraph and ourselves.  We are presently writing our case to present to the inquiry.  We have a significant number of case studies but require more.

Those involved in this campaign strongly believe that a correctly regulated asset based finance industry is in the best interest of the lending banks and companies; their clients, their staff and the country.  It would release funds to the SME sector.