When the value of Daniel's shares dropped suddenly, and the spread-betting firm he used closed his position, and he made a significant loss. But he said that the firm didn't make enough effort to get in touch with him, so he asked us to investigate.
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 value of these shares would increase to a certain value within a specified timescale and expected a sizeable profit.
But the value of the shares dropped. The size of the drop made it look like the loss would be more than the margin Daniel had paid in case something like this happened.
The firm phoned him to ask for an increased margin. But when they couldn't get through to Daniel on the number he'd given them, they closed the position. So Daniel made a significant loss.
Daniel felt that the firm should compensate him for the loss as they hadn't made that much effort to contact him. He said they called an out-of-date mobile phone number, even though they must have been aware he had a new number. He was unhappy that, having failed to contact him by phone, the firm hadn’t written to him. He’d been unaware of the need for an increased margin until it was too late.
He said that if the firm had phoned him on his new number, he would have paid the sum required right away. That would have enabled the firm to keep the position open for longer. This would have increased the chance that he might still benefit if the share price improved.
The firm rejected Daniel's complaint. They said that their terms and conditions are clear, stating that customers must give detail changes in writing. Unable to get any further, Daniel came to us with his complaint.
What we said
We looked at the firm's terms of business. We saw that they state that customers needed to notify them 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.
Daniel had said that the firm must have known his new number, as they had already called him on it. We established that although the firm had used that new number, this was only because it was in response to a voicemail message he’d left. He’d asked if someone could ring him back on that number about a routine administrative query.
There was nothing to suggest that he’d ever informed the firm in writing or by phone that he had a new number. If he’d mentioned this during the phone call, then they would have told him that they needed written confirmation to update its records.
We didn’t consider it unreasonable or unfair for the firm to need customers to notify in writing any changes to their contact details. We decided that the firm couldn't be held responsible for the breakdown in communication, so we didn't uphold Daniel's complaint.