Top MP demands regulator protects informants
The FCA had already been warned about its treatment of whistleblower by the parliamentary commission on banking standards in 2013
May 14 2016, 12:01am
The chairman of the Treasury select committee has warned the Financial Conduct Authority that it risks “neglecting the reasonable needs of whistleblowers” after allegations that the City regulator betrayed the confidence of informants.
Andrew Tyrie wrote to Tracey McDermott, acting chief executive of the authority, yesterday demanding assurances on how the regulator treated sensitive information given to it by a body representing small businesses.
The SME Alliance has accused the authority of passing on evidence that it presented to the regulator in confidence to the high street banks that were the subject of the companies’ complaints. This was first reported in The Times in January.
After the intervention of the committee, the authority admitted that it had passed “limited information” from the whistleblowers to the banks in question. Mr Tyrie said the regulator’s treatment of the group appeared to contradict its own policies, which are based on the assumption that “whistleblowers almost always want their information and identity to be protected”.
The alliance met senior staff at the authority last year and presented cases which it claimed highlighted evidence that banks had edited records of customers’ emails, call transcripts and how they presented their records in order to flatter their positions when in dispute with customers. It complained to Mr Tyrie in January, claiming that some customers had been “badly compromised” by the authority sharing the information with banks.
Concerns were raised when Ross McEwan, chief executive of Royal Bank of Scotland, one of the banks that was subject to the allegations, said in a radio interview in November that he had “looked through these files”.
The authority said it had decided not to treat the alliance as a whistleblower so was entitled to pass on information without the permission or knowledge of the complainants. It said the alliance had failed to make clear it was “providing this information in confidence”.
However, Mr Tyrie said the authority “appears still not to have grasped what’s needed to create an appropriate environment” for whistleblowers, despite receiving censure on the issue in 2013 from the parliamentary commission on banking standards.
The commission, which Mr Tyrie chaired, said three years ago that the “FCA appeared to show little appreciation of the personal dilemmas that whistleblowers may face”.
Yesterday, Mr Tyrie demanded “further assurances that the SME Alliance was treated reasonably”.
Nikki Turner, co-founder of the alliance, said that the group had presented a number of cases as examples of the alleged record tampering it believed was occurring to highlight its belief that there was a wider problem, and said that it did not ask or want the regulator to look into individual cases.
“It’s worrying the FCA were, on the one hand, sufficiently aware of the sensitivity and seriousness of the confidential information we gave them to ask our permission to share it with the police, but felt they needed no such authorisation regarding the banks,” she said.
The authority said it was satisfied that the steps it had taken were necessary and appropriate to assess the “serious allegations being raised”. It added that it did not believe that it had breached its own procedures.
The alliance said that it would urge the Treasury select committee to investigate the authority’s interpretation of the section of the law covering information sharing.
The regulator has said that “based on the work we have carried out, we have found no evidence that the banks have deliberately falsified or altered customer records”.