The number of whistleblower reports made to the FCA regarding activities by firms which cause ‘consumer detriment’ rose 15 per cent, according to research by law firm RPC.

In the year to 31 December 2020, this figure rose to 185, up from 161 the previous year.

Earlier this year the FCA published final guidance to clarify its expectations of firms on the fair treatment of vulnerable customers.

It aims to encourages firms to understand what harms their customers.

Consumer detriment has become an area of increasing focus for the FCA, particularly as the pandemic has led to more consumers finding themselves in a difficult financial position.

In the FCA’s latest Financial Lives survey published in February, the regulator estimated that there are now 27.7 million vulnerable consumers in the UK.

This is a sharp rise from the 24m vulnerable consumers before Covid-19.

RPC partner Jonathan Cary says: “As part of the FCA’s response to criticism that it has been too slow to act against scandals like mini-bonds it is going to take whistleblowing reports far more seriously and we expect to see more FCA investigations arising from whistleblower reports and an uptick in consumer redress schemes as a result.

“Following recent scandals, we expect the FCA to respond to the poor treatment of retail customers by issuing tougher fines. Firms looking to provide services to vulnerable retail customers can also expect more stringent checks before they are authorised.”

Areas where the regulator has taken regulatory action to prevent consumer detriment in the last year include pension transfers, equity release mortgages and buy now, pay later schemes.

According to RPC, whistleblowers will now receive optional updates on the FCA’s investigations into the problems identified by the whistleblowers.

Cary adds: “The rise in whistleblower reports shows greater engagement by the public in holding the financial services industry to account and the FCA is clear that consumer protection is still one of its key priorities.

“Covid has caused the FCA to focus further on the risks to vulnerable consumers. The regulator will be looking even  more closely to see what actions firms are taking to ensure customers are treated fairly.”