We urge the FCA to investigate the misleading advertising and unfair business practices of spread betting companies.
Hundreds of people face imminent bankruptcy and the loss of their homes unless the FCA immediately steps in to investigate the practices of spread betting companies.
Spread betting companies market their trading platforms to the public as sophisticated and reliable financial products; but when they have failed to work as advertised, it has resulted in enormous losses for their customers.
The fact that spread betting companies also offer huge levels of borrowing -and extend UNLIMITED liabilities to their clients without ANY credit checks - only multiply the risk that retail customers may suddenly find themselves with huge debts they are unable to pay.
The extreme market moves surrounding the Swiss Franc (January 15) highlight the dangers. Many investors who had only small accounts and believed they were protected are now hundreds of thousands of pounds in debt because the spread betting companies failed to perform as promised. For many - teachers, office workers, builders, small business owners - this failure will mean bankruptcy or years of crushing debt repayments unless we act immediately.
No other product in the UK is so unregulated or unsupervised, leaving customers virtually unprotected. The FCA must ensure spread betting products actually do what they claim, and investigate their advertising and business practices. Even while the FCA is cracking down on payday lenders for extending loans without background checks, spread betting companies place no caps at all on how much a client can lose even when the fault may lie with the companies themselves.
Most customers are not aware of the risks they are running - until its too late and they face debt collectors and bankruptcy. The FCA must intervene urgently.
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