Fitness and propriety top whistleblowers’ concerns about regulated firms
Concerns about the fitness and propriety of regulated firms and their staff featured as the top allegation reported by whistleblowers during the first quarter of 2022, according to data from the Financial Conduct Authority (FCA).
Around 104 complaints fell into this category during the three-month period, followed by concerns that firms were not treating customers fairly, with 70 complaints.
Other allegations related to compliance with the Financial Services and Markets Act (FSMA); the culture of organisations; compliance in general; fraud; as well as systems and controls.
The financial regulator received 276 new whistleblowing reports during the quarter, containing 540 allegations in total. A large proportion of these were received via their online reporting form and in most cases the whistleblower chose to provide their contact details rather than remaining anonymous.
This is broadly flat compared to the previous quarter, when the FCA received 279 whistleblowing reports, containing 525 allegations in total. Fitness and propriety, followed by treating customers fairly, were also the most common concerns over the last three months of 2021.
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The City watchdog has been ramping up its supervision of regulated firms, after a spate of high-profile scandals such as the collapse of mini-bond provider London Capital & Finance, which left thousands of everyday investors out of pocket.
Last month, the FCA unveiled its long-awaited Consumer Duty, which aims to improve how regulated firms – including peer-to-peer lending platforms – serve customers. The regulator said the new rules will “lead to a major shift in financial services” by setting higher and clearer standards of consumer protection.
The Duty will include requirements for firms to end rip-off charges and fees, make it easier to switch or cancel products, and to provide helpful and accessible customer support.
It also mandates firms to provide more clarity on their products and services, rather than burying key information in lengthy terms and conditions.
Read more: Consumer duty rules ‘present extra challenge’ for P2P lenders
In March, the FCA launched a campaign to encourage more whistleblowers to report wrongdoings.