Freetrade Limited · DRN-5995386

The complaint Mr P has complained that Freetrade Limited delayed depositing funds in his general investment account (‘GIA’), which prevented him from purchasing stocks and has led to a financial loss. What happened Mr P holds a GIA with Freetrade. On 6 January 2025 he sold some shares in a company I’ll refer to as ‘XTI’ at 19:30 GMT. Mr P wanted to buy back shares in the same company a couple of minutes later but he said he was unable to because the funds were not showing as being able to reinvest in Freetrade’s mobile application (‘app’). Mr P started a webchat with Freetrade at 19:35 on 6 January 2025 in which he made a formal complaint. He said he had missed an opportunity to purchase the XTI shares even though he understood that sale proceeds should be available to reinvest immediately via the app. At 19:44 and 19:49 Mr P purchased XTI shares using the proceeds of the shares he sold at 19:30. In the following days Mr P added to his complaint, explaining that he had lost around £900 in the 15 minutes he was unable to invest. On 10 January 2025 a consolidation exercise took place, where Mr P’s shareholding was reduced based on a 250:1 ratio. Mr P said as a result of not being able to complete his purchase at 19:33 on 6 January 2025 he ended up with around 5,275 shares less and he also has less shares following the consolidation. He said this had caused an ongoing financial loss. Freetrade didn’t uphold Mr P’s complaint. It suggested Mr P’s app may have failed to update or sync its data but said there was no platform error. Mr P remained unhappy and referred his complaint to the Financial Ombudsman Service. He maintained there was an issue with Freetrade’s app that prevented him from investing when he wanted to and this had led to a significant financial loss. Mr P provided various screenshots of Freetrade’s app showing the difficulties he’d faced. The Investigator considered the complaint and ultimately upheld it. While she noted that Freetrade had provided evidence that suggested Mr P’s monies were available for reinvestment immediately, she was persuaded by the screenshots provided by Mr P which demonstrated that the money was not available to reinvest until 19:44. She thought Mr P had most likely received less shares as a result of him not being able to make his investment at 19:33. She awarded £250 for the distress and inconvenience this caused and said Freetrade should pay Mr P the value of the additional shares he missed out on, which she estimated to be £135.47.

-- 1 of 4 --

Mr P didn’t accept this as still he thought he was missing over 5,000 shares. He maintained the price of the shares had increased significantly and he continued to suffer investment loss as a result. The Investigator discussed the matter with Mr P, and explained that Mr P was not missing 5,275 shares, because following the consolidation exercise this would’ve reduced to 21. She explained he could either accept her first view based on the price of the shares at the time, or receive 21 shares to reflect the number he ought to have had. Mr P didn’t agree. Freetrade also didn’t accept the Investigator’s view. It said there was no evidence to demonstrate a problem with the app and believed this was a problem at Mr P’s end that it wasn’t responsible for. As no agreement could be reached the complaint was passed to me to make a decision. I contacted both parties to explain my provisional findings. I said I thought there was sufficient evidence to demonstrate a problem with Freetrade’s app on 6 January 2025 and so Mr P had lost the opportunity to invest at a particular time. However, I hadn’t seen enough evidence to persuade me that Mr P would’ve been better off if he’d been able to make his investment at 19:33. I thought compensation of £300 in total was fair and reasonable in the circumstances. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Freetrade maintains that there was no issue with its system on 6 January 2025 when Mr P was attempting to make his trades. It has provided evidence to support that the proceeds of the sale of Mr P’s XTI shares at 19:30 were available to reinvest almost instantly. However, the evidence provided by Mr P shows that wasn’t his experience – his screenshots show that the funds were not available for him to reinvest for some time. He says he wasn’t able to make a further purchase until 19:44 and even at that time, not all of the proceeds of the sale were available to reinvest, which is why he had to make an additional purchase at 19:49. I’ve considered the evidence provided by each side carefully, but I’m ultimately still persuaded that Mr P experienced an issue with Freetrade’s app, as demonstrated by the screenshots he’s provided. I think that this caused him distress and inconvenience and he lost the opportunity to buy shares when he wanted to. So, I’m still upholding Mr P’s complaint in part and I require Freetrade to pay Mr P £300 to resolve it. I’ll explain why. Given that Freetrade’s internal systems show that Mr P’s funds were credited almost instantly, it says there must have been an issue with Mr P’s app. It says the app may not have been refreshing instantly, that there may have been device-level caching or sync delay or temporary session desynchronisation. Freetrade believes that restarting the app could’ve solved this problem. Freetrade also says that Mr P was using an iPhone XS and while still functional, it is more prone to performance constraints and is potentially affected by operating system/app compatibility and refresh behaviour. I accept that Mr P is using an older phone model. But it’s clear from the transaction history provided by Freetrade that the pattern of buying and selling stocks within minutes of each other isn’t unusual for him and he hasn’t reported experiencing such an issue before he did on 6 January 2025. Furthermore, Mr P asked Freetrade, using the chat function on his app, whether any delays he was seeing could be a result of his phone storing data or syncing issues. The representative told Mr P that his phone, “doesn’t store data locally or perform

-- 2 of 4 --

any syncing itself” and all the data he saw came directly from Freetrade’s servers in real time. So, while I understand Freetrade’s position that they cannot see any issue on their end, I’m still persuaded that Mr P experienced an issue on this occasion and that on balance, it is fair to hold Freetrade responsible for this. Even if I was persuaded that the issue Mr P experienced was specific to his phone, which I’m not, Freetrade says that where issues arise that can’t be explained on its end, this could be an issue with the app updating or syncing, which can be solved by restarting the app. Mr P reported the problem he was experiencing relatively quickly via Freetrade’s chat function, after allowing a few minutes for the money to become available to reinvest. He explained the problem he was having, that he was unable to reinvest funds from closed positions using unsettled cash. However, the agent, which I assume was a ‘chatbot’, misinterpreted the question and explained that he couldn’t withdraw cash from his account until the trades had settled. Mr P responded that this wasn’t what he was complaining about but he didn’t receive any further help until after he was able to make his purchases. Mr P clearly articulated his problem, so I would’ve expected the chatbot to understand this and offer solutions, such as restarting the app. Freetrade has told us that users of its app on older phone models could experience problems. If using an older phone model is likely to impact the app’s performance and therefore interfere with the user experience, then I would expect Freetrade to bring this to their customer’s attention. I don’t think it is good customer service to simply refer to terms and conditions when problems do occur. While I’m satisfied that Mr P experienced an issue with Freetrade’s app and that he should be compensated for this, I haven’t seen enough evidence to persuade me that this resulted in an investment loss. Mr P provided a screenshot taken from the app at 19:33 which showed that he could’ve purchased 69,897.1781 shares with the £3,204 he was expecting from the proceeds of the shares sold at 19:30. But, I haven’t seen enough evidence to persuade me that this is the number of shares Mr P would have received if his funds had been available to reinvest at the time. That’s because the number of shares was estimated based on a latest price, which was also subject to a fluctuating exchange rate, and any order he made would’ve also been affected by the liquidity of the shares. Having also reviewed Mr P’s trading history on 7 January 2025, it isn’t clear what he would’ve done had he received additional shares if he’d been able to make his purchase at 19:33 on 6 January 2025. I say this because Mr P made 31 individual sales and purchases of XTI shares on 7 January 2025; he didn’t simply make one purchase on 6 January 2025 and then sell all of the shares on 7 January 2025 when they achieved a particular price. So, there isn't a clear strategy that explains what he would have done. Furthermore, the share price moved, as did the exchange rates, throughout the day. In summary, I think there is evidence to suggest that Mr P encountered a delay reinvesting the proceeds of the sale of XTI shares and it’s possible Mr P may have received more shares had he been able to reinvest the funds sooner. But ultimately I haven’t seen sufficient evidence to persuade me that Mr P suffered an investment loss or that he was in a worse position overall. However, I’m satisfied that Mr P experienced a loss of opportunity and that he experienced distress and inconvenience as a result of the delay, and Freetrade could’ve done more to assist Mr P in the moment to resolve the issue. I believe that an award of £300 is fair and reasonable in the circumstances. I appreciate that Mr P doesn’t feel that £300 is sufficient given how long it has taken to sort things out. But I’m satisfied that the award fairly compensates Mr P for the issue he experienced. And while I note that Mr P didn’t agree with Freetrade’s response to his

-- 3 of 4 --

complaint, I’m satisfied it dealt with it within the eight weeks it is permitted under the Regulator’s rules. My final decision I’m upholding this complaint and I require Freetrade Limited to pay Mr P £300 to settle the matter. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 30 April 2026. Hannah Wise Ombudsman

-- 4 of 4 --