When the value of Daniel's shares dropped suddenly, it led to the closure of his spread-betting position, resulting in a significant loss.
What happened
Daniel held an account with a spread-betting firm. He’d taken a long position on the shares of a company. He’d bet that the shares’ value would increase to a certain point within a specific time and that a large profit would be made.
But the value of the shares dropped considerably. It looked like Daniel’s loss would be more than the margin he had paid in case something like this happened.
The firm phoned Daniel to ask for an increased margin. But when the firm couldn't reach him at the number he'd given, it closed his position. Daniel made a significant loss.
Daniel felt that the firm should pay him for the loss as it made little effort to contact him. He said it called an old phone number, even though it must have been aware he had a new number. Daniel was unhappy that, having failed to contact him by phone, the firm hadn’t written to him. He didn’t know about the need for an increased margin until it was too late.
He said that if the firm had called him on his new number, he would have paid the money immediately. That would have allowed the firm to keep the position open for longer, increasing the chance that he might still benefit.
The firm maintained it followed its terms and conditions, which required customers to make detailed changes in writing. Unable to get any further with his complaint to the firm, Daniel asked us to look at his case.
What we said
We looked at the firm's business terms. We saw that customers needed to inform the firm in writing of any changes or additions to their contact details. They also said that the firm could make requests for margin payments by phone and didn’t need to confirm any requests in writing.
Nothing suggested that Daniel had ever informed the firm in writing or by phone that he had a new number. If he’d mentioned this during the phone call, the firm would have told him it needed written confirmation to update its records.
We didn’t consider it unreasonable for the firm to require customers to notify them in writing of any changes to their contact details. We concluded the firm couldn't be held responsible for the communication breakdown, so we didn't uphold Daniel's complaint.