On-line FX trader ordered to reimburse complainant USD 12,000 that went missing with its transaction agent

The dispute relates to alleged losses the Complainant suffered when trading with the Scheme Member.
The Complainant was engaging in online forex trading and complained that the profit made on the trades were not paid by the Scheme Member, after the Complainant requested withdrawal of funds from his account.

The Complainant sought return of the funds in question which amounted to over $12,000 USD.
The Scheme Member advised that all withdrawal requests had been processed and therefore, there were no outstanding withdrawal requests for the Complainant. The Scheme Member sought evidence of monies being deposited into the Complainants trading account, as it considered no funds had been received and therefore the Complainant was not entitled to any withdrawal.

In addition the Scheme Member argued that it was not responsible for any failure of funds transfer as the transfers were managed by a third party company. If any wrong doing had arisen then it would be with the third party. For this reason the Scheme Member considered that the matter was outside FDRS jurisdiction.
Comment was sought from both parties regarding the Scheme Members allegations concerning the “third party”, in order to establish FDRS’ jurisdiction. After considering information provided; FDRS found there was jurisdiction to consider the actions of the third party, which was acting as an agent for the principal Scheme Member.

The adjudicator found that the Complainant contracted with the Scheme Member, a registered financial service provider, and if there are monies due to the Complainant, it is due by the Scheme Member. How the Scheme Member dealt with processing its payments (such as with the third party provider) was of no concern to the Complainant, or any other customer using its online platform. Therefore any contention by the Scheme Member that the Complainant should be pursuing the third party “for any monies due, is absolutely untenable from a consumer legislation or contract law perspective”.
Keeping the above in mind, and considering that the applicable onus of proof is ‘the balance of probabilities’, the adjudicator was of the view that the Complainant had shown that it was more likely than not that the Scheme Member had not acted in accordance with the provisions of the agreement between the parties; and also that it had acted unreasonably; or unlawfully.

In this case there was sufficient basis to conclude that the Complainant’s loss resulted from the actions of the Scheme Member, even if it were the result of the agent third party. The evidence did not support that the Scheme Member reimbursed the Complainant when the withdrawal was requested. While the funds may have been paid to the agent third party, ultimately FDRS was satisfied the funds did not reach the Complainant as they should have.

The complaint was upheld and the Scheme Member ordered to reimburse in full the withdrawal request.