The Financial Conduct Authority has said it will change its approach to whistleblowers after a survey revealed widespread dissatisfaction among those who alert the regulator to wrongdoing.
The organisation acknowledged problems including whistleblowers not “feeling heard”; a lack of dialogue with them, which prompts doubts about the chances of a proper investigation; and frustration over a shortage of updates, sometimes interpreted as delay and inaction.
The majority of those who raised concerns with the regulator said they were “extremely or somewhat dissatisfied” with how they had been listened to and how issues had been explored, while most were dissatisfied with the outcome of their reports, an FCA study found.
When asked to rate overall satisfaction with the authority’s handling of their whistleblowing report, 15 of the 21 respondents said they were “extremely or somewhat dissatisfied”. Only two expressed any satisfaction.
The regulator said it was “disappointed” with the findings. “Whistleblowers are key in our efforts and we greatly value their contribution,” it said.
It pledged to make reforms, including improving the use of whistleblowers’ information, better communication over what has been done with their reports and engagement with the government over a review of whistleblowing legislation.
Georgina Halford-Hall, chief executive of WhistleblowersUK, expressed doubts about whether the moves would amount to more than “warm words that fail to address the real issues”. She called the size of the survey “almost comedic”, given that the regulator had received and assessed 1,041 whistleblower reports with 2,114 separate allegations last year.
“Financial services whistleblowers are turning to the United States and other countries with a record of taking whistleblowers seriously and treating them with respect and professionalism,” she said.
The authority said that about a third of the whistleblower reports it received led to some form of intervention.
The survey was instigated by the regulator’s board after whistleblowers raised concerns about how their information was being handled. While 68 people were identified, only 21 provided full responses, but the regulator felt the survey produced enough valuable information to justify action.
The authority has faced several whistleblowing controversies, including criticism for not taking stronger action when Jes Staley kept his job as Barclays’ chief executive after the FCA had fined him in 2018 for attempting to unmask a whistleblower. It also apologised to George Patellis, a senior financier who exposed the Connaught investment scandal, over its failure to act “promptly and decisively” on information he had provided.
The regulator said whistleblowers provided “unique insights from inside the firms and markets it regulates”. It said they had helped the authority to identify and correct problems including consumers being mis-sold loans, unauthorised firms taking on customers and failings in firms’ own whistleblowing procedures.
The regulator noted that its ability to share information with whistleblowers was “often restricted by legal confidentiality obligations”, but its new approach would be to ensure that such restrictions did not prevent updates being provided in as many cases as possible.
Therese Chambers, joint executive director of enforcement and market oversight at the authority, said: “We want to make sure we’re capturing and using the information provided by whistleblowers as effectively as possible and to give them as much information as the law allows on how we have acted on their concerns.”
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