Not upheld: Irresponsible trading/lending - failure to comply with Consumer Duty obligations and FCA vulnerable customer guidance; failure to intervene in high-risk CFD trading despite sustained losses complaint against Trading 212 UK Limited

Decision detail

Summary

Mr O complained that Trading 212 UK Limited breached Consumer Duty obligations by allowing him to continue trading high-risk CFDs despite suffering severe and sustained losses of approximately £450,500 between December 2019 and July 2023. Mr O argued that T212 failed to intervene, provide warnings, or assess his vulnerability despite clear warning signs. T212 defended its position on the basis that it operated as an execution-only service, provided comprehensive risk disclosures, relied on Mr O's financial declarations, and had no information suggesting he was vulnerable or could not afford losses. The ombudsman found that T212 had not treated Mr O unfairly, concluding that the firm provided clear risk warnings, reasonably relied on Mr O's financial information, and had no objective indicators of vulnerability or foreseeable harm that would have justified intervention in his self-directed trading. The ombudsman emphasised that Consumer Duty does not require firms to prevent all losses or intervene without a clear basis, and that Mr O bore responsibility for his own trading decisions.

The Ombudsman's reasoning

The ombudsman found that T212 provided clear and comprehensive risk warnings about CFDs at multiple stages (website, application process, terms, and order placement). Mr O was an execution-only client responsible for his own trading decisions. Although T212 had obligations under Consumer Duty to monitor customer outcomes and identify vulnerability, the ombudsman concluded that based on information available to T212 at the time, there were no clear indicators of vulnerability or foreseeable harm. Mr O's losses, while substantial, fell within his declared financial profile, and he did not disclose any financial or mental health difficulties to T212. The ombudsman rejected the argument that T212 should have intervened based on trading patterns alone, noting that frequent trading and losses are inherent features of CFD trading that Mr O understood and accepted. The ombudsman emphasised that Consumer Duty does not require firms to prevent all possible harm or intervene in self-directed trading without a clear and objective basis, and that foreseeable harm must be assessed using information actually available to the firm at the time, not hindsight.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website