The number of whistleblower reports made to the Financial Conduct Authority relating to ‘pressure selling’ jumped by nearly a quarter last year, according to new data.
A Freedom of Information request, submitted by law firm RPC, showed the City watchdog received 58 whistleblower reports on ‘pressure selling’ in 2019-20, up from 47 the year before.
It follows a steady upward trend over the past few years, with the regulator receiving just 16 reports in 2016-17.
‘Pressure selling’ refers to instances where the sale of products and services subjects customers to ‘aggressive or oppressive behaviour’ or ‘unfair coercion’.
According to RPC, the rise in reports suggests that a few outlier firms may have started to return to the high-pressure sales practices that were targeted by regulators over the past decade.
Since the Retail Distribution Review, the FCA has moved to prevent financial services firms from relying on commission-led selling tactics.
Jonathan Cary, partner at RPC, said: “The regulator is very focused on making sure financial services firms don’t adopt bad habits more prevalent a decade ago.
“Senior management teams would be well advised to emphasise the importance of treating customers fairly in these difficult times to avoid short-sighted sales tactics by rogue employees."
Mr Cary pointed out that in recent times the FCA had taken a hard-line approach towards behaviour that could prove detrimental to consumers, especially throughout the pandemic.
He said: “Selling techniques which exploit consumers have been brought into sharp focus during the pandemic.
“Firms must have policies in place which ensure the protection of the customer, above all else, at this time.”
The threat of a deep recession and finances being stretched further meant some employees could resort to these aggressive selling practices to hit crucial commission targets, he added.
“In order to stop this the tone must be set from the top down, creating a positive sales culture, where employees don’t feel under pressure.”
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.