Not upheld: Account administration errors complaint against Crowdcube Capital Limited

Decision detail

Summary

Mr M complained about a 5% fee charged by Crowdcube when he sold shares in Company R through a secondary sale opportunity in early 2025. He argued the fee was unjustified, not covered in his original 2016 purchase terms, and excessive relative to the work performed. Crowdcube argued the secondary sale was a new discretionary service introduced years after the original investment, with terms applicable only to that transaction, and that the fee was clearly disclosed and comparable to market rates. The ombudsman found the secondary sale was indeed a new service not covered by the original agreement, the fee was clearly communicated before Mr M agreed to participate, and the fee was reasonable and comparable to competitors' charges. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the secondary sale was a new discretionary service not covered by the original 2016 purchase agreement, which was transaction-specific and silent on secondary sales. The ombudsman accepted that Crowdcube's terms operate on a transaction-by-transaction basis rather than as ongoing terms. The fee was clearly disclosed before Mr M agreed to participate, giving him an informed choice. The ombudsman found Crowdcube's explanation of the resource-intensive nature of the transaction credible, including 18 months of negotiations, legal work, compliance requirements, and investor engagement. The 5% fee was found to be comparable to market rates charged by competitors. The Consumer Duty does not require fees to align only with direct costs or act as a price cap. The payment delay was reasonable given the volume of investors and regulatory processes required, and interest was fully passed on to Mr M.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website