Owner system

Letter: Give whistleblower compensation, not a US bounty system

Compensating whistleblowers for the risk they face in reporting fraud is indisputable – and that is why damages in employment tribunals for whistleblowers must remain uncapped, reflecting potentially lifelong career losses. .

However, to suggest that the UK should follow the US system of whistleblower ‘rewards’ (‘HMRC urged to increase whistleblower payments in fight against evasion’, report, August 24) is based on a misconception.

Whistleblowers can receive staggering amounts of money in the United States, but the proportion of whistleblowers who receive anything is tiny. In 2021, the US Internal Revenue Service received over 14,000 claims, but only 179 whistleblowers received payments.

US whistleblowers must expose frauds involving hundreds of thousands of dollars, and the information must lead to successful collection of fraud proceeds. The rewards bear no relation to the damage done to the whistleblower and do nothing to compensate for the thousands of people raising valid concerns that do not meet IRS criteria.

If HMRC wants to offer more generous financial rewards, that’s fine, but encouraging people to speak up is not the main challenge. As HMRC points out, there is no shortage of whistleblowers – almost 14,000 reported to the agency in 2020-21. The real problem is listening to whistleblowers: too many of them are ignored or victimized when they raise an issue.

At Protect, we have referred many callers to HMRC during the pandemic, raising concerns about employers fraudulently claiming leave payments; employers often did not have an internal whistleblower system to address concerns.

Getting good insider whistleblowing can mean employers stop fraud before regulators need to get involved, and losses to the public can be minimized. In our experience, most whistleblowers simply want the wrongdoing to stop. Our 2021 research with YouGov found that just 2% of respondents said they would raise an alert for a financial reward, while over 40% would raise concern regardless of the risk to themselves.

Requiring all employers to have good whistleblower provisions and ensuring law enforcement agencies have adequate resources would be a much better way to fight fraud than the US bounty system.

Elizabeth Gardiner
Managing Director, Protect, London E2, UK