Not upheld: Account closure without notice complaint against OANDA Europe Limited

Decision detail

Summary

Mr B, a longstanding Oanda customer, complained that excessive financing fees and inflated currency conversion rates on his long US Natural Gas positions prevented him from profiting from price increases, causing losses exceeding £20,000. He also complained that Oanda unfairly closed his account in retaliation for his complaints. The ombudsman found that Mr B had misunderstood how funding rates work—they were derived from futures contract price differences rather than interest rates—and that the rates reflected proper market mechanics consistent with the extreme volatility in Natural Gas prices during 2022-2023. The ombudsman also found that Oanda's decision to close the account was justified given Mr B's stated psychological distress and health impacts from trading. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr B's central argument was based on a misunderstanding of how funding rates work. The rates were not interest charges for lending money but factors derived from the difference in prices between current and next futures contracts. The ombudsman noted that Natural Gas prices showed extreme volatility during the period (ranging from under $4 to over $8), making monthly price differences of 8% or more entirely plausible and not indicative of wrongdoing. The ombudsman concluded that the funding rates reflected proper market mechanics and were consistent with the underlying futures market conditions at the time. Regarding account closure, the ombudsman found Oanda was justified in closing the account given Mr B's stated health concerns and Oanda's prior unsuccessful attempts to reassure him.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website