The number of whistleblower reports to the regulator about activities which cause consumer detriment rose 15% from 161 to 185 last year, according to a City law firm’s study.
RPC said reports about financial firms’ activities can include those where customers are treated unfairly by a particular provider, or where they’re wrongly recommended/mis-sold a product or sold a product at an unfair price by a regulated adviser.
Amid increased regulatory action to prevent consumer detriment in debt collection, guarantor lending, equity release mortgages and buy-now, pay-later schemes, the Financial Conduct Authority (FCA) also launched a campaign on March 23 to encourage more whistleblower reports from industry bodies and consumers.
As part of this campaign, whistleblowers will receive optional updates on the FCA’s investigations into the problems identified they’ve identified. It has also involved the launch of mandatory training among financial firms to ensure that when staff issue a whistleblower report, their identities are protected, they’re enabled to do so early enough, and they can ensure the regulator deals with the report correctly.
Jonathan Cary, partner at RPC, said: “As part of the FCA’s response to criticism that it has been too slow to act against scandals like mini-bonds, it is going to take whistleblowing reports far more seriously and we expect to see more FCA investigations arising from whistleblower reports and an uptick in consumer redress schemes as a result.”
He added: “The rise in whistleblower reports shows greater engagement by the public in holding the financial services industry to account and the FCA is clear that consumer protection is still one of its key priorities. Following recent scandals, we expect the FCA to respond to the poor treatment of retail customers by issuing tougher fines.
“Firms looking to provide services to vulnerable retail customers can also expect more stringent checks before they are authorised.”