Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Whistleblowing Complaints Surge Linked to Consumer Duty
The Financial Conduct Authority (FCA) has reported a significant increase in whistleblowing complaints during the first quarter of the year, highlighting the impact of Consumer Duty on accountability within financial services. According to the FCA, 355 whistleblowing reports were submitted in Q1, up from 281 in both the same period last year and in Q4 2025. Of these, 210 complaints were related to Consumer Duty issues, making it the most reported area.
Consumer Duty is described as more than just a regulatory framework focused on customer outcomes; it is increasingly seen as a mechanism for industry self-policing. Firms are now expected not only to monitor their own behaviour but also to identify and challenge poor practices within their distribution chains. If concerns are not addressed internally, firms are required to escalate them to the FCA.
This shift has created an environment where brokers, lenders, and providers are accountable for both their own conduct and the standards maintained by their partners. The latest data demonstrates that firms are taking their obligations seriously and are willing to report concerns when necessary.
Distribution relationships are a key feature of the industry, and under the current regulatory landscape, these relationships depend on all parties being able to evidence good outcomes as required by Consumer Duty. This is particularly important for vulnerable customers. Firms can no longer treat compliance as someone else’s responsibility; if poor customer outcomes are identified, regulators will examine what other participants knew and what oversight was in place.
Firms are now expected to proactively gather evidence to demonstrate good outcomes for customers, especially those with vulnerable characteristics. The FCA has highlighted the challenges firms face in capturing and monitoring customer data, noting that reliance on staff training and subjective assessments is not sufficient. The regulator has also raised concerns about firms using reactive measures, such as waiting for customers to disclose vulnerabilities or only identifying issues once they become visible, which can lead to significant gaps in identification.
The FCA and industry bodies continue to advocate for the adoption of technology to support compliance and improve the consistency and robustness of data collection.
Source: Mortgage Strategy