Not upheld: Account administration errors complaint against Crowdcube Capital Limited

Decision detail

Summary

Miss T complained that Crowdcube unfairly sold her shares to pay administration fees, resulting in the loss of her entire shareholding. She argued the sales were unauthorized and that it was not common practice for platforms to sell stocks to cover fees. Crowdcube responded that the GIA terms explicitly permitted share sales to cover fees when cash was insufficient, and that Miss T had failed to provide alternative broker details when offered the option to transfer shares elsewhere at listing. The ombudsman upheld Crowdcube's position, finding that the firm applied the GIA terms fairly and that selling assets to cover fees is standard practice across investment brokers. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Miss T had inquired about transferring shares to another broker, there was insufficient evidence she provided the required broker details to Crowdcube, so her shares defaulted to the GIA. The GIA terms explicitly authorized Crowdcube to sell shares to cover administration fees when cash was insufficient. Although Miss T felt the share sales were unauthorized and questioned whether this practice was common, the ombudsman determined this is standard practice across many investment brokers and Crowdcube applied the terms fairly and consistently. The decline in share value was a contributing factor to the eventual sale of all shares, but this did not constitute unfair conduct by Crowdcube.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website