Not upheld: Failure to restrict trading following vulnerability disclosure; appropriateness of CFD trading account complaint against Trading 212 UK Limited

Decision detail

Summary

Mr K opened a CFD trading account with Trading 212 in June 2024 and began trading in August, placing approximately 250 trades over six months. On 5 December 2024, after incurring a loss of nearly £1,900 on a position in company P, Mr K contacted Trading 212 via online chat expressing vulnerability, stating he couldn't afford the loss, couldn't sleep, was stressed, and had no knowledge of CFDs. Trading 212 did not impose any trading restrictions, and Mr K resumed trading a week later, ultimately losing a further £2,300 through January 2025. Mr K complained that Trading 212 should have restricted his account following his vulnerability disclosure on 5 December. The ombudsman found that while Trading 212 should have considered a temporary trading break, the account should not have been permanently closed, as Mr K's concerns were focused on the specific trade loss rather than CFDs generally, he had experienced similar volatility over four months without issue, and his subsequent actions suggested he wished to continue trading. The ombudsman upheld Trading 212's £200 goodwill offer as appropriate.

The Ombudsman's reasoning

The ombudsman found that while the account opening was appropriate based on Mr K's responses to the appropriateness questionnaire, Trading 212 should have considered imposing a temporary trading break following Mr K's vulnerable disclosure on 5 December 2024. However, the ombudsman rejected the investigator's recommendation for indefinite account closure or permanent restriction. The ombudsman reasoned that: (1) Mr K's chat concerns were primarily focused on the specific P trade loss rather than CFDs generally; (2) Mr K had experienced losses and gains of several hundreds of pounds over four months without issue, so the thousands-level loss, while significant, did not necessarily indicate he was unsuitable for trading; (3) Mr K's subsequent actions (amending financials upward, resuming trading after a week) suggested he wanted to continue trading rather than indicating compulsive gambling; (4) Trading 212 had no automated system alerts and no pattern of concerning behaviour to trigger proactive monitoring; (5) even if a trading break had been imposed, Mr K took a self-imposed week-long break anyway, so the practical impact would have been minimal; and (6) the Consumer Duty does not require firms to protect customers from all investment losses, only to avoid causing foreseeable harm and to handle vulnerability appropriately when disclosed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website