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Regulator’s whistleblowing framework labelled ‘charade’

Shadow-Figure-Street-Black-WhiteThe FCA’s whistleblowing framework is paying lip service to supporting whistleblowers, but does little to protect them or act on disclosures, informants fear.

Some whistleblowers labelled the policy as “window dressing” and “a charade” when they shared the experience they encountered with the FCA for a report by the All-Party Parliamentary Group for Whistleblowing published this week.

The group and the report call for stronger protection for whistleblowers.

The FCA’s arrangements, along with those of the NHS, attracted “significant criticism”, some as a result of “heightened expectations” which arose from the introduction of additional whistleblower protections to allow safe reporting, the report outlines.

The APPG report The Personal Cost of Doing the Right Thing and the Cost to Society of Ignoring it cites the most common criticism as “might look good on paper but can be ineffective or insufficient in practice.”

The FCA’s rules on whistleblowing aim to encourage a culture, where people are able to raise concerns about poor practice. These include putting in place internal whistleblowing arrangements, having training on disclosures, or appointing a senior manager or non-executive director as whistleblower champion.

Based on the whistleblowers’ accounts, the FCA fell short on occasions with its failure to act on disclosures, lack of clear time plan to act, as well as the lack of transparency about the process, absence of any feedback or insufficient protection for informants. They also felt that the FCA was “reluctant to act” and was “looking for reasons not to act.”

Should advisers be reporting their own bad apples?

In addition they feared that the City watchdog was more concerned with the interests and perception of the financial industry rather than that of whistleblowers.

One respondent to the call for evidence described the FCA whistleblowing process as “pathetic.”

They said: “After a three-hour meeting presenting evidence, the FCA never again contacted me, no update, no process. After I was terminated, I pressed the FCA case officer, and he told me they never even contacted the company to inquire.

“Ultimately, the wrong-doing chief executive of the bank was terminated after my allegations, with ZERO help from FCA. But too late for me as I lost my job, settled for an amount less than was owed to me in deferred compensation, and have been unable to get another job, because the word get[s] around the market.”

In response to the report, an FCA spokeswoman says: “Whistleblowers play an important role in exposing misconduct in firms and contribute intelligence crucial to action we take against firms and individuals.

“We consider every whistleblowing report fully, assessing the evidence thoroughly to determine whether there is a case for us to take action.

“We have robust policies and practices in place to maintain whistleblower confidentiality, track whistleblowing intelligence properly, and share it across the FCA.”

She adds: “We look forward to reading the APPG report and will be happy to meet with them to discuss it in more detail.”

In April at the Money Marketing Interactive conference, the FCA co-director of life insurance and financial advice supervision Debbie Gupta said the FCA was concerned that advisers do not report bad practice, which prompted criticism of the FCA’s approach to whistleblowing from the industry.


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 19th July 2019 at 1:15 pm

    “We have robust policies and practices in place to maintain whistleblower confidentiality, track whistleblowing intelligence properly, and share it across the FCA.”

    What a load of utter, unadulterated and brazen rubbish (to put it in publishable terms). The FCA’s policies on whistleblowing are nothing but a hollow sham, as are those on its consultations, accountability and the claims on its website to secure an appropriate degree of protection for consumers.

  2. By any measure, the FCA is useless. The FT were quoting the total annual (that is ANNUAL) amount of financial fraud to be £130bn or 6% of the UKs GDP. So if the FCA is protecting us, what exactly have they achieved? Almost nada.

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