What whistleblowing reveals about Consumer Duty in financial services
Discover the latest insights from the FCA's new report, focusing on whistleblowing trends and the rising significance of Consumer Duty.
The Financial Conduct Authority (FCA) has recently published its Prescribed Persons Annual Report, offering a detailed account of the whistleblowing disclosures it received between April 2024 and March 2025. As the regulator responsible for ensuring that financial markets work well for individuals, businesses, and the economy as a whole, the FCA's role in whistleblower protection is critical. The report provides a window into the prevailing concerns within the UK financial services sector and highlights emerging trends that regulators and institutions alike must address.
Among the key themes to emerge this year are compliance failures, issues of fitness and propriety, consumer detriment, and toxic or ineffective organisational cultures. These categories have consistently featured in previous reports. However, the latest data reveals a notable rise in concerns related to "consumer duty" — a concept that underscores the importance of firms delivering good outcomes for retail customers.
In this blog, we’ll explore:
Whistleblowing as a vital compliance tool
Whistleblowing plays a vital role in the early identification of risks within regulated firms. Employees, former employees, and other stakeholders are often the first to detect misconduct or regulatory breaches. By encouraging individuals to speak up, the FCA gains access to first-hand intelligence that may otherwise remain hidden.
Whistleblowers most frequently raised concerns about general compliance lapses. These include breaches of internal policies, regulatory non-compliance, and deliberate attempts to circumvent the rules. Equally prominent were reports on fitness and propriety — questioning whether individuals in key roles possess the integrity and competence necessary to fulfil their responsibilities. Such concerns often relate to behaviour unbecoming of financial professionals, such as conflicts of interest, dishonesty, or lack of relevant expertise. Many of these concerns could have been avoided with clearer, more accessible communication to customers. Tools
Consumer detriment and organisational culture
Consumer detriment remains a perennial concern, with whistleblowers flagging practices that adversely affect customers. These include hidden charges, poor handling of complaints, aggressive sales tactics, and misleading product information. Many of these practices reflect not just isolated incidents but systemic issues rooted in poor corporate culture. An organisation that prioritises profit over ethics may foster behaviours that ultimately harm consumers.
The report highlights that culture continues to be a significant driver of misconduct. In one case a culture of pressure-selling driven by management was highlighted. This necessitated direct FCA engagement.
The emergence of consumer duty as a whistleblowing theme
The most striking development in this year’s report is the rise in whistleblowing disclosures related to the FCA’s new Consumer Duty. Introduced in 2023, Consumer Duty requires firms to deliver good outcomes for retail customers, placing emphasis on the quality of advice, suitability of products, and the clarity of communication. Firms are expected to put the interests of customers at the heart of their operations.
Whistleblowers have brought to light a range of practices that contravene this principle. These include instances of mis-selling financial products, failing to provide appropriate advice based on customer circumstances, and an overall lack of focus on customer welfare. In some cases, whistleblowers reported that customer-facing staff were incentivised to prioritise sales over suitability, leading to harmful outcomes for clients.
The report notes that in several of these cases, the FCA deemed it necessary to intervene. Interventions have ranged from supervisory engagement and thematic reviews to formal investigations and enforcement action. The regulator has emphasised that breaches of the Consumer Duty are not merely compliance issues but ethical failures that undermine trust in the financial system.
Why Consumer Duty matters more than ever
The prominence of Consumer Duty in whistleblowing reports reflects broader shifts in regulatory expectations and public sentiment. Over the last nine months, the FCA have published multiple reports highlighting their increasing focus on Consumer Duty:
- Consumer Support Outcome: Good Practice and Areas for Improvement (Mar 2025)
- Consumer Duty Rule Review and Next Steps (Mar 2025)
- Consumer Duty Board Reports: Good and Poor Practice (Dec 2024)
- Payments Sector Multi-Firm Review (Q4 2024)
It’s clear that focus on Consumer Duty is increasing and the regulator is taking an active role. They’re looking to see real-world consumer benefits, such as clear communication and transparent pricing, themes very close to
Looking Ahead
Firms that wish to remain on the right side of regulation must not only understand the letter of the rules but embrace their spirit. This means embedding the principles of fairness, transparency, and accountability at every level.
The surge in whistleblowing reports related to Consumer Duty signals a shift in focus from rule-following to outcome-delivering. It reflects a maturing regulatory environment where ethical conduct and customer well-being are no longer optional extras but core expectations. The onus is now on firms to respond not just with compliance frameworks, but with cultures that truly champion doing the right thing.
How
One of the key ways firms can meet the ‘consumer understanding’ requirement is by making sure clients genuinely grasp the information they’re given.
What whistleblowing reveals about Consumer Duty in financial services
What does the FCA whistleblowing report reveal about Consumer Duty?
The report highlights a growing number of concerns linked to Consumer Duty, including mis-selling, poor advice, and unclear communication. This shows regulators are shifting focus from processes to outcomes, expecting firms to prove they deliver fair treatment and genuinely positive results for customers.
Why is whistleblowing important in financial services?
Whistleblowing provides early insight into risks that may not be visible through audits or reports. Employees often spot compliance failures, cultural issues, or harmful practices first. This helps regulators like the Financial Conduct Authority identify problems before they escalate into widespread consumer harm.
What types of issues are whistleblowers reporting most?
Common issues include compliance failures, poor organisational culture, misleading products, and consumer detriment. Many reports point to systemic problems rather than isolated mistakes, suggesting that unclear communication and pressure-driven sales environments are still widespread across financial services firms.
How does Consumer Duty change expectations for firms?
Consumer Duty requires firms to ensure customers understand products and receive fair outcomes. It moves beyond simply providing information to proving comprehension. Firms must demonstrate that communication is clear, accessible, and supports informed decision-making at every stage of the customer journey.
What risks do firms face if they ignore these trends?
Ignoring Consumer Duty increases the risk of regulatory intervention, complaints, and reputational damage. Whistleblowing reports can trigger investigations, enforcement action, or fines. More importantly, poor practices can erode customer trust and lead to long-term business and compliance issues.
How can firms improve compliance with Consumer Duty?
Firms should focus on clear communication, transparency, and customer understanding. This includes simplifying language, improving accessibility, and verifying comprehension. Tools like