Not upheld: Irresponsible lending / Failure to prevent foreseeable harm / Consumer Duty breach complaint against Trading 212 UK Limited

Decision detail

Summary

Mr S opened a CFD trading account with Trading 212 on 6 February 2025 and incurred losses of £3,615. He complained that T212 inappropriately allowed him to trade high-risk CFDs without adequate consumer protection, noting that his deposits (£13,050) significantly exceeded his stated annual investment intention (£5,000). Mr S argued that T212 failed to comply with FCA Consumer Duty by not intervening when his behaviour materially deviated from declared limits. The ombudsman found that T212 conducted a fair onboarding process with clear risk warnings and appropriateness assessment, that Mr S demonstrated CFD knowledge and accepted the risks, and that as an execution-only client Mr S bore sole responsibility for trading decisions. The ombudsman noted that net deposits (after £9,353 withdrawals) were modest relative to Mr S's declared income and savings, and found no warning signs requiring intervention. The complaint was not upheld as the losses resulted from Mr S's own trading decisions in a high-risk product.

The Ombudsman's reasoning

The ombudsman found that T212 conducted a fair and reasonable onboarding process compliant with FCA COBS 10.1.2R, including an appropriateness assessment, clear risk warnings, and disclosure of CFD terms. Mr S passed the knowledge test demonstrating understanding of CFDs and accepted the risks. As an execution-only client, Mr S alone was responsible for trading decisions. The ombudsman rejected the argument that deposits exceeding stated intentions required intervention, noting that T212 assessed funding on a 'net deposits' basis (£13,050 deposited minus £9,353 withdrawn = substantially lower net position) which is industry standard. The ombudsman found no warning signs or indicators of vulnerability that should have alerted T212 to intervene. The losses were trading losses resulting from Mr S's own decisions in a high-risk product where losses are a core feature. Consumer Duty does not require firms to prevent all losses, only to identify predictable risks, communicate them clearly, and support informed decision-making, which T212 did.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website