Not upheld: Account administration errors complaint against Freetrade Limited

Decision detail

Summary

Mr B complained that Freetrade's £17 per stock charge for transferring his four US shares (totalling £68, representing over 60% of his £111 portfolio value) was excessive and created an unfair barrier to exit. He argued the charges were not clearly disclosed upfront and contravened FCA Consumer Duty principles. Freetrade defended the charges as standard third-party custodian fees in line with industry norms and offered an alternative free cash transfer. The ombudsman found the per-stock fee structure reasonable, the charges in line with industry norms, and the disclosure sufficiently clear through website information and account terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman recognised that while businesses must treat customers fairly under FCA rules, they have flexibility in setting prices and exercising commercial judgment. The per-stock fee structure, though disadvantageous to Mr B, was applied consistently to all customers. The charge was in line with industry norms and was levied by a third-party custodian beyond Freetrade's direct control. Freetrade provided sufficiently clear information through its website and terms and conditions, and offered a reasonable alternative (cash transfer) that avoided the charges entirely. The ombudsman concluded that Freetrade was treating Mr B fairly despite the disproportionate impact on his small portfolio.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website