The FCA has recently been promoting the use of whistleblowing to root out poor practice and the resultant potential for bad customer outcomes. They have even produced posters to encourage the practice.
As part of the campaign, the FCA has published materials for firms to share with employees, as well as using its events to highlight the campaign.
It has also produced a digital toolkit for industry bodies, consumer groups and whistleblowing groups to encourage individuals to have confidence to step forward.
Whistleblowers that report to the FCA will have a dedicated case manager. They can meet with the FCA to discuss their concerns and can receive optional regular updates throughout the investigation. Every report the FCA receives is reviewed and the FCA will protect individual whistleblowers’ identities.
The FCA has been investing in increased resourcing to support whistleblower interaction, including increasing the headcount on its whistleblowing team. This specialist team are trained to debrief and interact directly with whistleblowers, as well as liaising with various departments across the organisation.
The FCA would like to remind firms that culture and governance remain a key priority for the FCA. Its whistleblowing rules require firms to have effective arrangements in place for employees to raise concerns, and to guarantee these concerns are handled appropriately and confidentially.
Unfortunately, this attitude still prevails within the adult world of business with the victimisation of whistleblowers.
The FCA introduced a requirement for firms to appoint a whistleblowers’ champion to make sure there is senior management oversight over the integrity, independence and effectiveness of the firm’s arrangements. These include those arrangements designed to protect whistleblowers from victimisation, as well as overseeing the preparation of an annual report to the firm’s governing body.
The FCA page on whistleblowing is https://www.fca.org.uk/firms/whistleblowing
Before contacting the FCA, you should consider:
- raising your concerns internally at your firm (if you are confident doing so)
- speaking with the whistleblowing charity Protect
- taking time to understand more about the legal protections given to whistleblowers through the Public Interest Disclosure Act
The FCA Whistleblowing contact details:
- call dedicated team: 0207 066 9200
- email: email@example.com
- write to: Intelligence Department (Ref PIDA) Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN
The main problem is the system is that whistleblowing is despised by many people on the basis of “nobody likes/trusts a grass” from the playgrounds. However, this would mainly by the perpetrators of misdemeanours who then proceed to punish the “tale-tellers”. Unfortunately, this attitude still prevails within the adult world of business with the victimisation of whistleblowers.
The well-meaning, often public-spirited, activity of whistleblowing about bad practice is much more difficult to execute than it should be. The whistleblower is in constant fear of reprisal, which could take many forms.
The chances are that the activities being reported are being practiced by line management or senior management of an organisation. It is a brave employee who criticises or even questions their managers and senior people, particularly if the accusations are accurate.
I am sure that if there were statistics in this area, they would prove that whistleblowing can only be undertaken by somebody who has left, or is leaving, an organisation for fear of unfair detriment that may occur when the management of the organisation becomes aware that someone has whistleblown.
Personally, I have formally whistleblown twice.
The first time was with a firm that had several elements of poor practice for whom I was undertaking compliance oversight. I picked up a case that involved so many “no-noes” that it would have made a wonderful test case of how much bad practice could be undertaken in one case – early retirement from a DB Scheme– losing benefits, early- encashment of endowments, churning of investments, not utilising existing deposits to negate the need for any of these actions. The Director could not believe that I was questioning his advice – Who do you think you are? It is my name over the door!” So, I felt that I had no alternative but to leave the firm and report it to the FCA. The firm ceased to exist going under the banner of another firm.
The second time, I was overseeing another firm that was charging for reviews and not actually doing anything for their money. Again, this was raised with the owner of the firm and he said that he did not undertake the reviews because he did not have time. There were several other shortcomings in their processes. Since I felt that I could not offer my services to them anymore, I outlined al the shortcomings that I saw in my letter of termination of our contract. I copied in firstname.lastname@example.org to this letter.
Interestingly, my manner of whistleblowing caused a bit of a short-circuit at the FCA. The agent that I spoke with had a problem that my whistleblowing was overt and not anonymous and would need a separate process from the one that was normally followed.
I was advised that the FCA had undertaken an investigation into the firm. I do not know the outcome of that investigation.
So, to draw a conclusion with my experience, whistleblowing does get investigated once the FCA is satisfied that it is not a frivolous or vindictive report.
The perpetrators are normally very upset that their poor practice has been revealed and are likely to react negatively.
However, I work on the basis – who is worse, the perpetrator or the witness who could have done something to stop bad practice, but did nothing and allowed it to happen/recur?
Whistleblowing is not for the feint hearted.
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