In early 2024, Harper’s trading platform decided to close her account because she did not meet their minimum thresholds for income and savings. The trading platform gave her 60 days’ notice to close her open trades and transfer her cash balance to her bank account. During the 60-day notice period, Harper was not able to open any new trades.
Harper complained that the trading platform had acted unconscionably. She did not want to close her account, and she would lose around $16,000 on her open trades (contracts for difference) if she closed them.
Harper could not persuade the trading platform to change their mind. She complained to FSCL about the trading platform’s decision to close her account.
Dispute
Harper said the trading platform had breached the law. They had unilaterally decided to close her account and placed restrictions on it during the notice period.
The trading platform did not agree to keep the account open. Under their terms and conditions, the trading platform were able to close Harper’s trading account.
Review
We decided not to investigate the complaint because there was little prospect Harper would achieve the outcome she was seeking – that her account would be allowed to stay open.
The trading platform had reasonable grounds to close Harper’s account. The financial information she submitted during an annual review did not support that she met the trading platform’s minimum thresholds.
The trading platform’s policy to have minimum thresholds was appropriate. A consumer with low income and little assets is unlikely to have the risk tolerance to invest in contracts for difference. They are complex and high risk investment products.
We also concluded that the trading platform had not breached the law. They are not obliged to continue to have someone as a customer.
We were initially concerned that the 60-day notice period was not fair. It was significantly longer than required under the terms and conditions, but we considered that the trading platform needed to treat Harper fairly when they ended their relationship with her.
However, we concluded that the length of the notice period did not have a material impact on the position Harper was left in. The trades would probably close at significant losses, irrespective of the amount of time the trading platform gave Harper to close her account, because the trades had been running at losses for a long time.
Harper was disappointed with the outcome of her complaint. She planned to lodge a claim with the Disputes Tribunal instead.
Insights for consumers and participants
We expect financial service providers to treat consumers fairly when they decide to end their relationship with a consumer. Fair treatment may mean giving the consumer a longer notice period than the minimum set out in the provider’s terms and conditions.
