non-professional account went sub-zero; then bank transfer request was cancelled to cover sub-zero losses. is that OK? what about negative balance protections

[rilski]

Hey guys,

I have been doing some spread betting over the last few years but don't have a professional investors account. Ups and downs however made some good profits over the last 12 months. I've made one risky investment recently and it went wrong. I had some guarantees (about £6k) on the account which were not enough to cover the losses on that day (about £7k) and I had no stop loss in place.  I've requested the available funds to be withdrawn before market opened to limit exposure and potentially trigger the margin calls a bit earlier on the day when I lost the money. I was also hoping that as a non-professional account I would get negative balance protection. However that wasn't the case. IG  cancelled the withdrawal request and used the money to offset the losses and had no explanation fo what happened on that day. My spread betting account is now having 0 balance as of today.

I am not moaning about the losses or decisions made. I like making risks every now and then. Just want to make sure if what IG did was legitimate. Never had a call or an email from them to explain what happened on that day. And also no explanations on the negative balance protections.

Please advise if anyone had a similar experience. 

Thanks!

[nkwe]

On 15/02/2021 at 15:27, rilski said:

Hey guys,

I have been doing some spread betting over the last few years but don't have a professional investors account. Ups and downs however made some good profits over the last 12 months. I've made one risky investment recently and it went wrong. I had some guarantees (about £6k) on the account which were not enough to cover the losses on that day (about £7k) and I had no stop loss in place.  I've requested the available funds to be withdrawn before market opened to limit exposure and potentially trigger the margin calls a bit earlier on the day when I lost the money. I was also hoping that as a non-professional account I would get negative balance protection. However that wasn't the case. IG  cancelled the withdrawal request and used the money to offset the losses and had no explanation fo what happened on that day. My spread betting account is now having 0 balance as of today.

I am not moaning about the losses or decisions made. I like making risks every now and then. Just want to make sure if what IG did was legitimate. Never had a call or an email from them to explain what happened on that day. And also no explanations on the negative balance protections.

Please advise if anyone had a similar experience. 

Thanks!

you need to hold them accountable. They scam clients then frustrate clients with their responses when client is trying to follow up. They want you to let go. Don't let it go, sue them.

[Fletch]

I would suspect you'll find that IG stopping you trying to withdraw funds already in your account to protect them from being used to cover your losses is entirely legitimate. Apart from what was already held in your account (i.e. the 6K), have you been asked to pay anything over and above that figure to cover the difference of what was lost (i.e the 7K losses minus the 6K already in your account)? If so, then you might have a case as you then are being actively asked to pay the negative balance from other sources. Saying that, I'm no legal expert, so probably best to seek professional advice if you feel you have been treated unfairly.

Edited February 18, 2021 by Fletch
correction

[Joo]

If you went negative it's normal that your withdrawal was cancelled ! You can't withdraw money that you don't have.

[eastside]

i can imagine what you are going through as i myself had a 25K loss couple of months back due to bad management. its very easy for the mind to be clouded. 

we do know that the withdrawal process is not instant and could take 1-2 business days. also you could have moved part of your the funds to your shares dealing account (or even CFD) from the SB account to keep it safe temporarily from exposure from existing positions. 

[David30b]

4 hours ago, Joo said:

If you went negative it's normal that your withdrawal was cancelled ! You can't withdraw money that you don't have.

Seems likely - there has to be a line somewhere - otherwise they would specifically have an overdrafts team - which would be a time/cost ie loss maker for IG and as 70+% non pro trades are non profitable would rack up losses for IG -  which ultimately would be the end of IG!!!  - OK a bit far fetched but a fail safe so IG DON'T GO DOWN THE PAIN  is what everyone  NEEDS.

 

Edited February 20, 2021 by David30b
not finished

[Joo]

And by the way, your account was not sub zero if you had money that you tried to withdraw... that money counts to cover losses.

[CharlotteIG]

On 15/02/2021 at 13:27, rilski said:

Hey guys,

I have been doing some spread betting over the last few years but don't have a professional investors account. Ups and downs however made some good profits over the last 12 months. I've made one risky investment recently and it went wrong. I had some guarantees (about £6k) on the account which were not enough to cover the losses on that day (about £7k) and I had no stop loss in place.  I've requested the available funds to be withdrawn before market opened to limit exposure and potentially trigger the margin calls a bit earlier on the day when I lost the money. I was also hoping that as a non-professional account I would get negative balance protection. However that wasn't the case. IG  cancelled the withdrawal request and used the money to offset the losses and had no explanation fo what happened on that day. My spread betting account is now having 0 balance as of today.

I am not moaning about the losses or decisions made. I like making risks every now and then. Just want to make sure if what IG did was legitimate. Never had a call or an email from them to explain what happened on that day. And also no explanations on the negative balance protections.

Please advise if anyone had a similar experience. 

Thanks!

 

On 18/02/2021 at 17:37, nkwe said:

you need to hold them accountable. They scam clients then frustrate clients with their responses when client is trying to follow up. They want you to let go. Don't let it go, sue them.

Thanks for your post. 

You can't withdraw most of your funds before market open and when the market opens and moves against you ask IG to cover all of the losses incurred by those positions. That's taking advantage of the debt coverage brokers take on for retail clients. 

Reversing your withdrawal is legitimate and allowed in this situation. 

Any losses that weren't covered by your reversed withdrawal we will cover (to bring your account out of a negative balance and back to £0). You will be able to see how much IG covered/lost by checking your history. It will be called 'account adjustment'. 

All the best