Not upheld: scam protection and investment losses from pump and dump scheme complaint against Trading 212 UK Limited trading as Trading 212

Decision detail

Summary

Mr P complained that Trading 212 failed to prevent him falling victim to a pump and dump scam involving shares in company X that he purchased after seeing social media promotions. T212 rejected the complaint, citing its execution-only service terms where customers bear sole responsibility for investment decisions. The ombudsman upheld T212's position, finding that T212 had no knowledge of the scam, had conducted appropriate due diligence checks before making the shares available, and had provided general information about such scams to customers. The ombudsman concluded that T212 was not responsible for losses caused by third-party scammers and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that T212 provided an execution-only service where all investment decisions were the customer's sole responsibility. T212 could not be held responsible for the actions of third-party scammers of which it had no knowledge. T212 had conducted appropriate due diligence checks before making X shares available for trading and had provided general information about investment scams to customers. The losses resulted from the scam, not from any action or inaction by T212.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website