Partially upheld: System error / Incorrect pricing display / Misleading information complaint against Pepperstone Limited

Decision detail

Summary

Mr A complained that Pepperstone's mobile app incorrectly displayed profits of over £12,000 on six USD/CHF CFD contracts, when he actually received only £182 upon closing them. He sought £12,000 redress plus additional compensation for distress and inconvenience. Pepperstone attributed the error to a third-party data issue and offered £500 as goodwill compensation. The ombudsman upheld the complaint in part, endorsing the £500 offer as fair and reasonable, reasoning that the actual additional profit Mr A could have made by holding positions longer was only approximately £60, and that the error was readily recognisable by reference to actual exchange rate movements.

The Ombudsman's reasoning

The ombudsman concluded that while Pepperstone made an error in displaying incorrect profit figures, the firm acted fairly in offering £500 compensation. The natural starting point for assessing loss was what Mr A might have achieved had he kept positions open instead of closing them based on the erroneous information. Since Pepperstone calculated the potential additional profit at only approximately £60, the £500 offer exceeded any realistic additional gain Mr A could have made. The ombudsman noted that the error was readily recognisable as an error by reference to actual exchange rate data, and that Mr A could not reasonably expect profits of an entirely different order from real market movements. The ombudsman gave Pepperstone credit for offering redress voluntarily and concluded the £500 was proportionate to the impact of the error, though acknowledging it may not be proportionate to the effort Mr A expended in pursuing the complaint.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website