Not upheld: Fraud reimbursement (APP scams) complaint against Pepperstone Limited

Decision detail

Summary

Ms P complained that Pepperstone Limited failed to prevent a third party from fraudulently accessing her trading account and closing her open positions, causing significant financial loss. Ms P alleged the third party used phishing software to gain unauthorised access after she declined to share her credentials. The ombudsman found that Ms P's engagement with the third party was entirely remote from Pepperstone Limited, with no firm involvement. The ombudsman concluded that Ms P bore responsibility for safeguarding her account details, the firm had no obligation to monitor the execution-only account, and there was no evidence of security flaws in the firm's platform or that the firm should have detected the breach. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Ms P's own presentation of facts established that her engagement with the third party was remote to Pepperstone Limited, with no direct or indirect involvement by the firm. The safeguarding of account details was Ms P's responsibility under the firm's terms, not the firm's. As the account was execution-only, Pepperstone Limited had no obligation to monitor trading activities. Orders made through the account using the correct credentials would be deemed to have requisite authority. There was no evidence of a security breach in Pepperstone Limited's systems or that the firm should have detected unauthorised access.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website