IG Index Limited · DRN-6083684

The complaint Mr K complains that IG Index Limited allowed him to open a spreadbetting account which wasn’t appropriate for him. What happened Mr K opened a spread betting account with IG Index Limited (IG) in March 2021. He said:- - IG failed to conduct an adequate appropriateness assessment before allowing him to trade. - They did not provide clear and prominent risk warnings about the high-risk nature of leverage products, so he didn’t understand the magnitude of the potential losses he could face. - The risk warnings available now are not what they were when he opened his account. - They allowed him to deposit funds using credit cards and the interest applied to the account exacerbated his losses of £11,730. To resolve the complaint, he wishes to be put back in the position he would have been if he hadn’t have opened the spread betting account. He complained to IG in April 2025, but they didn’t uphold his complaint. In the final response letter, they said:- - Mr K had passed the appropriateness test, scoring above the required points to be able to open a spreadbetting account. - They had sufficiently warned him of the risks associated with a spreading account. - He did not inform them of any financial concerns until he brought this complaint. - IG do not prohibit the use of credit cards, and he deposited £6,580 from credit cards – significantly below what would have given rise to any concern in his situation. - Unhappy with this response, Mr K brought his complaint to this service. Our investigator considered the merits of the complaint and said that IG had carried out the level of assessment that was required and that the assessment was fair. She wrote in detail to explain the rules and regulations that applied as well as IG’s User Agreement terms. She concluded that IG hadn’t done anything wrong and didn’t uphold his complaint. As Mr K didn’t agree with the investigator, and said:- - The FCA had stated in a publication in June 2017 that CFD firms fail to meet expectations on appropriateness assessments and didn’t comply with COBS 10.2.1R. - He said a clients’ experience was separate from their knowledge. - He said no information was obtained to verify his experience and they relied on his

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self-declared level of knowledge instead of competency style or knowledge-based questions to test his understanding of key leveraged trading risks. - He didn’t think based on this information; knowledge can be inferred from experience in these circumstances. - He referred to previous decisions issued by this service in support of his view. - Allowing a customer to fund high-risk leveraged speculation with credit cards, which inherently compounds financial vulnerability, is a failure to take all reasonable steps to avoid causing foreseeable harm. As no agreement could be reached, this came to me to make 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. Having done so, I agree with the investigator’s conclusion for broadly the same reasons. I do not uphold this complaint. My role at this service is to resolve individual disputes between businesses and consumers. I must consider whether IG have been fair and reasonable in their dealings with Mr K with the relevant rules and regulations in mind. I may not comment on each point made, and I mean no discourtesy by this, but I will focus on drawing conclusions on the points I consider key to the complaint. However, I would like to reassure Mr K that I have considered submissions by both parties before reaching my conclusion. The first point for me to consider is whether Mr K should have been allowed to trade with IG to begin with. The Financial Conduct Authority’s (FCA) handbook, COBS rule 10A outlines what a business should do to ensure the account is appropriate for the consumer. To establish this, IG should have checked that Mr K had previous experience in this type of trading and had the relevant knowledge and experience of investments generally. They should have asked about his financial situation, his ability to bear any financial risk as well as his ability to understand the risks of this type of trading. As part of the appropriateness test Mr K informed IG that he had traded more than twenty times in the last three years in shares and bonds, exchange traded derivatives and OTC derivatives and had done so either independently or with advice. He confirmed that he understood IG’s products due to his role in a financial institution and had relevant professional qualification or education. He also declared his income was £75,000 and his savings were £37,500. Mr K’s concerns around testing his knowledge have been noted. His reference to other decisions issued by this service are not considerations that I can apply here as each case is decided on its own facts and merits. Here I can see that IG used his answers about his experience to decide whether the account was appropriate. While I can see that a detailed knowledge question hasn’t been asked in the appropriateness assessment, the rules do to allow IG to infer knowledge from experience. The rules do not require him to be an expert in spread betting, but to have sufficient knowledge and/or experience to understand the risks involved. Mr K did have the relevant experience to meet the threshold and scored significantly higher than the required scores for the account to be appropriate. In this situation, I am satisfied they didn’t need to ask him further questions relating to his knowledge. It was reasonable for IG to infer his knowledge from the fact that in the last three years prior to opening his account, he had experience in

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trading shares in bonds, exchange traded derivatives and OTC derivatives. I’ve also seen IG’s criteria to qualify for a leveraged account and I’m satisfied that he scored above those criteria and that IG obtained all the information required to satisfy the regulatory requirements. Based on the information presented, I can’t see any reason why the account would not have been appropriate for him and I think IG’s conclusion was fair and reasonable. IG provided an execution only service and are reliant on information provided to them about the customers circumstances. COBS rule 10A.2.6 says that a business is entitled to rely on the information the consumer provides them, and that is what IG did here. There nothing to suggest they ought to have been aware that the information provided was manifestly out of date, inaccurate or incomplete. I think it is important to add here that there was no ongoing obligation on IG to monitor Mr K’s account for appropriateness, and they were not required to his manage account. I haven’t seen that they had any reason to probe the information Mr K gave them and in the absence of any reason to, I wouldn’t expect them to intervene with his trading. IG has provided a copy of their risk warnings about this type of trading on their website, but I am also aware of consistent risk warnings being displayed on their communications. A further risk warning is also provided at account opening and Mr K was provided with their User Agreement and Risk Disclosure Notice which included additional warnings in relation to this type of trading. He was required to confirm he had read these when he signed up to the account, so I am satisfied that he was correctly given notice of the nature of risk that trading in spreadbetting would bring. I can see that Mr K was making his own decisions to trade while he held his account, about what to trade, how much and how often. He did not make IG aware of any concerns around personal finances or any health issues, nor was this information changed until he brought this complaint in April 2025. At this point IG’s response was to restrict trading on the account. I know Mr K feels they should have intervened sooner but given that they responded swiftly upon being made aware of his financial situation, I think they have met their regulatory obligations. Mr K places significance on the use of his credit card as a reason that should have alerted IG to financial concerns. It is not uncommon for traders to use credit cards to deposit funds and there are no rules or regulations restricting IG from accepting deposits using this method. The trading activity on his accounts would appear to be consistent with his declared income and assets at account opening. Both his spending and his losses were consistent with his savings and income and there was nothing to suggest any vulnerability. I’ve also seen no evidence that Mr K’s credit cards had been declined or that his trading behaviour was erratic. Mr K did lose large sums of money in trading with IG, but this is not unusual for this type of trading, so I’m not persuaded that those losses ought to have given rise to awareness of foreseeable harm or triggered further action from IG. Overall, I see no reason for IG to have scrutinised his trading activity on this basis and don’t think IG needed to intervene here. Mr K has provided detailed submissions about his concerns so I know he will be disappointed with my decision, but I’m not persuaded that IG treated him unfairly, or failed to comply with any regulatory requirements, so I won’t be asking them to do anything.

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My final decision For the reasons given above, I do not uphold this complaint against IG Index Limited. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K to accept or reject my decision before 27 April 2026. Naima Abdul-Rasool Ombudsman

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