Rise in whistleblowers reporting banks for mistreating customers

Complaints from whistleblowers have soared five- fold amid concerns that banks and insurers are not treating their customers fairly.

The City watchdog received 347 reports from finance workers warning that their employer was acting unfairly towards customers in 2019, Telegraph Money can reveal.

That is almost five times more than it received in 2017 when the total was just 73, according to figures obtained through the Freedom of Information Act. The number of workers blowing the whistle on fraud, poor data security and detriment caused to consumers also rose.

There were between 110 and 160 reports made to the Financial Conduct Authority about each of these issues in 2019. Concerns included denying legitimate insurance claims, harassing customers over debts or giving them misleading financial information so that they parted with more of their cash.

However, there were concerns that few firms were rebuked by the regulator. In 2019 the FCA took action in just under half of cases. In 6pc of cases it took no action. The remaining 45pc remained under investigation.

About three quarters of all financial whistleblowers work at either a bank or insurance firm, according to Protect, the whistleblower charity. Many reports never make it to the regulator and are ignored by firms.

One source, who worked at a major financial advice firm and asked to remain anonymous, discovered that the company had been charging clients for advice they had never received.

“It was standard practice. Some people overpaid for years and were never told,” he said. A senior director told employees how they could extract higher fees from clients by misrepresenting financial information, he added. “People were being charged five figures when really it should be just three or four figures,” said the whistleblower. When he raised these concerns, he was ignored and later dismissed. A Protect spokesman said finance was one of the industries it received the most complaints about. An FCA spokesman said all reports were fully investigated by the watchdog: “Whistleblowing reports are a vital source of information for us, helping us to do our job and protect consumers.”