Plus500 UK Ltd · DRN-5954233

The complaint Mr R complains that Plus500 UK Ltd restricted and subsequently closed his trading account preventing him from managing his account margin. This resulted in his Contracts for Difference positions being liquidated causing significant losses. What happened Mr R held a Contracts for Difference (CFD) trading account with Plus500. On 17 and 24 February 2025, as part of their regulatory obligations to ensure the information they hold for their clients is up to date, they requested documents to verify the source of his recent funds. On 27 February 2025, Plus500 issued Mr R a termination notice under Section 22.6 of the User Agreement informing him that he would be restricted from placing new trades. They said he could still fund the account to meet margin calls, but it was later established that this was a miscommunication by Plus500, and the account restriction meant he wasn’t able to deposit funds. This restriction was lifted for a short period and in that time Mr R was able to deposit £3,200. He says Plus500’s administration of his account and the lack of communication from them significantly impacted him. He said their restrictions on his account were imposed inconsistently which left him unable to manage his account margin in a period of heightened market volatility. During this period, four of his sell positions in Natural Gas were liquidated resulting in a loss of approximately £45,340. To resolve his complaint, he would like his losses to be reimbursed in full, and for Plus500 to formally acknowledge they breached their duty of care by providing misleading information, that they failed to support him through termination of the account and would like a full investigation into the circumstances surrounding the account restriction and their internal failures. Plus500 didn’t uphold his complaint. They said they exercised their right to terminate the account in accordance with the terms of the account User Agreement and to comply with the Consumer Duty obligations. They say they were not liable for any loss resulting from restricting his account and any losses he incurred were not due to improper notification of the restrictions placed on making deposits to the account, but because of the trading decisions he made. They did however acknowledge the error made when the initial termination notice was sent on 27 February 2025 stating he was able to fund his account. They made an offer of £1,500 as a gesture of good will. They explained they came to this figure because he was able to deposit £3,200 and later withdraw £2,206.17 leaving a deficit of £993.83. They rounded this up to £1000 and offered an addition £500 for the distress and inconvenience he may have experienced. Mr R didn’t accept the offer and felt Plus500 were responsible for his entire losses as it was an avoidable situation where they had failed to provide him with the tools to respond to the market movements and avoid foreseeable harm.

-- 1 of 4 --

As they didn’t uphold it, he brought his complaint to this service. The investigator considered the merits of the complaint and detailed the terms and conditions of the account which note the margin requirements and the obligations of the parties. She concluded that Plus500 hadn’t done anything wrong and didn’t uphold the complaint. As Mr R didn’t agree with the investigator, this came to me for a decision. 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. Mr role here is to resolve complaints between businesses and consumers and not to punish a business where wrongdoing has been established. In reviewing this complaint, I may not comment on each point and focus on what I think are the key issues in the complaint. That said, I would like to reassure Mr R that I have considered all the evidence and information provided before reaching my conclusion including his more recent detailed submissions. Having done so, I do not uphold the complaint. I will explain further. I don’t think it is necessary to address why the account termination notice was issued. The material facts of this are well known to both parties. It is also not in dispute that an error was made by Plus500 when they issued the termination notice, indicating that Mr R could deposit funds to maintain his account margin. The question for me to decide is whether that error and the surrounding actions caused Mr R to suffer the losses he claims. I note Mr R contacted Plus500 to explain that he was experiencing significant stress while he was trading. He said, “I’m really stressed regarding this and causing me lots of emotional distress.” When he was asked to provide financial evidence to confirm his transactions, in response he said, “Yes it seems intrusive. I am in huge loss and had to borrow some money from friends and family to secure my positions.” I have taken this into account when considering what actions Plus500 took in response to this and the overall impact on Mr R. Mr R says he suffered losses because he wasn’t able to manage his margin due to the restrictions placed, but looking at the trading records, account timeline and events, I am not persuaded. While the restriction may have coincided with a period of volatility, there is insufficient evidence to say the losses would have been avoided. The high period of volatility would likely have added to the risk of Mr R incurring losses and I’m not persuaded that being able to fund the account would necessarily have avoided those losses particularly where market movements were affecting the positions he held. There is a potential that depositing funds would have added to the losses he would have incurred. I’ve also thought about whether the restriction placed on the account impacted his ability to act. The termination notice sent to Mr R on 27 February 2025 refers him to Section 22.6 of the User Agreement. This confirms Plus500 was entitled to terminate the Client Agreement but also states, “Any open positions should be closed by you as soon as reasonably practicable and in any event no longer than 14 days after we give Notice, after which we reserve the right to close such Transactions on your behalf, at the last available price, before permanently closing your Trading Account.” So, Mr R was advised to close his positions within the fourteen-day notice period. Based on what I have seen, I am satisfied the restriction related to funding and the account status and

-- 2 of 4 --

not preventing the closure of existing positions. There was nothing to suggest there was anything preventing him from reducing his exposure by closing his positions. I fully appreciate the confusion caused when Plus500 said he could manage his margin when it was restricted and then unrestricted this in error. This did result in Mr R depositing £3200 and suffering a £993.83 loss as a result. I do agree that allowing him to deposit these funds when the account was restricted created confusion. He suffered loss that is directly related to the error made Plus500 so it is only right that they should correct this and put Mr R back in the position he would have been in had the error not occurred. Plus500 did make an offer of £1000, rounding up the losses he incurred in addition to £500 for distress and inconvenience. It is clear the losses here were directly caused by Plus500 allowing him to deposit funds in error, caused by their mismanagement of his account restrictions. Given this situation did cause him to question their management of his account termination as well as cause him considerable stress and frustration only adding to the stress that he had already made them aware of, I think the offer is fair and reasonable and in line with what we would award at this service. I have also thought about what would have been different if the error hadn’t been made and whether the outcome would have been different for the wider losses Mr R suffered. As I have said above, Mr R wouldn’t have been able to fund the account in any event, and he had already been advised to close his positions within the fourteen-day period. I haven’t seen any evidence that would persuade me that the outcome would have been any different. Ultimately, Mr R could have closed his positions but didn’t, this is a decision he took in managing the account in the circumstances and I wouldn’t hold Plus500 responsible for any losses incurred as a result. The Consumer Duty regulations place an obligation on Plus500 to communicate in a way that was fair, clear and not misleading and I have thought about this throughout this complaint. We have already discussed the error Plus500 made informing Mr R that he could deposit funds. That communication was inaccurate and as such I find that they did fall short of the standards expected. However, failings in communication does not automatically give rise to liability for consequential losses. The key question is whether that failing caused detriment of the scale Mr R claims and warrants upholding the complaint to compensate him for his total losses. While I find the communication was not as accurate as it should have been, I am not persuaded that this failing caused the losses he suffered when his CFD positions were liquidated. Mr R was finding it necessary to borrow money from friends and family and was experiencing considerable stress already and I have taken that into account. In this situation, I would expect Plus500 to proactively prevent any additional harm to Mr R which I can reasonably say was foreseeable in these circumstances. Their response to restrict the account and prevent Mr R from funding the account any further (notwithstanding the error mentioned above) was therefore entirely fair and reasonable to prevent further harm. While this was not part of the original complaint, I do have inquisitorial remit to consider additional elements that I think may be relevant, so I have also looked at whether the account was appropriate for Mr R. This means that at the account opening stage, Plus500 needed to decide based on the information provided whether he had the necessary knowledge and experience to understand the risks involved. I can see that Mr R did not pass the appropriateness test based on his answers in 2021 and 2023 but in this situation the Financial Conduct Authority’s COBS rule 10.3.1 ask Plus500 to warn Mr R that the product wasn’t appropriate and whether he would like to proceed regardless. He did agree to proceed and Plus500 allowed him to open an account. He

-- 3 of 4 --

continued to trade until his account was closed in March 2025. Overall, I am satisfied the appropriateness was correctly assessed and the regulatory requirements followed. Putting things right I know Mr R will be disappointed with my decision especially because of the scale of losses he’s incurred and his financial situation, but overall, I’m not persuaded that Plus500 were liable or responsible for all the losses he incurred and is claiming here. I don’t think they have been unfair or unreasonable in their dealings, and I’ve not seen any evidence that they failed to act in accordance with the terms and conditions of the account. As stated above, where Plus500 have fallen short of the standards expected of them, they have already offered to resolve this. Mr R informed us, he hasn’t received any payment of the offer made, as such, Plus500 should pay Mr R £1500. This is made up of £1000 for the losses incurred (rounded up from £993.83) and £500 in recognition of the distress and inconvenience he suffered. My final decision I uphold this complaint against Plus500UK Ltd and they should pay Mr R as directed above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr R to accept or reject my decision before 28 April 2026. Naima Abdul-Rasool Ombudsman

-- 4 of 4 --