eToro (UK) Limited · DRN-6047348

The complaint Mr W complains that as a result of a system failure at eToro (UK) Limited, he was unable to undertake a funds transfer to his ISA before the end of the tax year. Mr W states that because of the issue, he lost the opportunity to make use of his 2024/2025 ISA allowance. To put things right, Mr W would now like eToro to increase the compensation that they’ve offered so that it reflects the potential capital gains tax liability he may face. What happened Mr W holds a dealing account with eToro. He first contacted their customer service team on 4 April 2025, shortly after discovering that he was unable to process a withdrawal; that’s because he was unable to add a payee. Mr W explained the purpose of the withdrawal was to enable him to make a contribution into his stocks and shares ISA, prior to the 2024/2025 ISA allowance deadline, which was on 5 April 2025. eToro’s customer service team explained that they were aware of a technical fault affecting some customers with eToro money accounts and were working to get the problem resolved. During this interaction, eToro explained to Mr W that as an alternative solution, he could transfer the money to his eToro investment account, and a manual withdrawal could be performed. Mr W followed these instructions and made a withdrawal of $13,712 USD (at a rate of £1.3008) and on 5 April 2025, a wire transfer payment was sent to his bank account. Shortly afterwards, Mr W decided to formally complain to eToro. In summary, he said that he was unhappy he’d been unable to move the monies from his eToro account across to his external bank account to fund his ISA. He went on to say that he considered the impact of this could result in having to pay capital gains tax that could amount to around £240 on the monies that he intended to put in his ISA. After reviewing Mr W’s complaint, eToro apologised for the trouble that their system issue had caused him. eToro also said that the transfer issue arose only with certain customers using a specific version of iOS. However, as they’d been able to provide Mr W with a workaround that worked, whilst they were upholding his complaint, they wouldn’t be offering to refund any tax he might pay but did offer $150 to apologise for the inconvenience. Mr W was unhappy with eToro’s response, so he referred his complaint to this service. The complaint was then considered by one of our Investigators. Whilst he agreed there was a technical fault that did prevent Mr W from initially withdrawing the funds from his eToro account in the way he wished, he didn’t think that this fault contributed to Mr W missing the ISA deadline. Because of this, he didn’t think that eToro should cover any potential tax liabilities that he may incur or increase the compensation that they’d already awarded. Despite this, our Investigator did agree that there had been some frustration and loss of expectation caused by the technical error. Considering the technical fault was rectified

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quickly and eToro provided alternative solutions that allowed Mr W to make a withdrawal, he felt the $150 offered was a fair amount that reflected the impact caused by their error. Mr W, however, disagreed with our Investigator’s findings. In summary, he said: “At the time I attempted to move £10,000 out of my eToro Money account ahead of the 5 April 2025 ISA deadline, I was presented with two viable options. The first was to withdraw the funds directly to my bank account, which eToro states may take up to three business days. The second option was to transfer the funds into eToro’s client portal account, which would take up to two business days and then allow instant onward transfers. Either option would have enabled me to meet the ISA deadline if processed in line with the timeframes quoted by eToro. However, due to a technical fault affecting eToro Money — which you have acknowledged — once the funds arrived in the client portal account, the payee functionality did not work. As a result, I was unable to transfer the funds onward as expected. I was then forced to move the funds back to the main eToro trading account, introducing a further potential delay of up to two business days, and then initiate a separate withdrawal to my bank account, which could take up to three additional business days. This compounded delay made it categorically impossible to meet the ISA deadline. It is therefore unreasonable that I should bear the financial consequences of delays caused entirely by failures within eToro’s systems. The irreversible nature of this loss is central to my complaint. An unused ISA allowance cannot be carried forward or reclaimed. As a higher-rate taxpayer, holding these investments outside an ISA now exposes me to capital gains tax at 24%. Based on a conservative estimated return of 10%, this results in a foreseeable tax liability of approximately £240. This is not speculative; it is a predictable financial consequence directly linked to the missed ISA contribution. You noted that eToro offered an alternative route via a manual withdrawal from the trading account. However, by the time this became necessary, the cumulative delays caused by the platform malfunction meant that meeting the ISA deadline was no longer feasible by any route. The failure of the client portal system — not my actions — removed any realistic possibility of completing the transfer in time. Finally, the $150 compensation offered by eToro does not reflect the financial harm suffered. While this amount may align with guidelines for inconvenience or distress, my complaint concerns a tangible financial loss arising from a documented platform failure. The amount appears arbitrary and was never explained or linked to the actual loss incurred. My request for £240 directly corresponds to the capital gains tax exposure created by eToro’s failure and represents a fair and proportionate resolution. In summary, there is a clear causal link between eToro’s system failure and my inability to make a time-sensitive ISA contribution. I took reasonable steps to act within the quoted timeframes, and I was prevented from doing so solely because eToro’s systems did not operate as advertised. I therefore maintain that my requested compensation of £240 is justified and ask that this matter now be reviewed by an Ombudsman.” Our Investigator was not persuaded to change his view as he didn’t believe Mr W had presented any new arguments he’d not already considered or responded to. Unhappy with that outcome, Mr W then asked the Investigator to pass the case to an Ombudsman for a decision.

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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. I have summarised this complaint in less detail than Mr W has done and I’ve done so using my own words. The purpose of my decision isn’t to address every single point raised by all of the parties involved. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it - I haven’t. I’m satisfied that I don’t need to comment on every individual argument to be able to reach what I think is the right outcome. No discourtesy is intended by this; our rules allow me to do this and it simply reflects the informal nature of our service as a free alternative to the courts. My role is to consider the evidence presented by Mr W and eToro in order to reach what I think is an independent, fair and reasonable decision based on the facts of the case. In deciding what’s fair and reasonable, I must consider the relevant law, regulation and best industry practice. Where there’s conflicting information about what happened and gaps in what we know, my role is to weigh up the evidence we do have, but it is for me to decide, based on the available information that I've been given, what's more likely than not to have happened. And, having done so, whilst I’m upholding Mr W’s complaint, I won’t be asking eToro to do anything beyond what they’ve already offered - I’ll explain why below. From what I’ve seen, Mr W chose to begin the ISA funding process on 4 April 2025, the day before the tax-year end deadline. The final day for contributions, 5 April 2025, fell on a Saturday and transfers between providers are not always instantaneous, particularly over the weekends when processing times can be slower or systems may not operate in the same way as on a business day. While many consumers understandably assume that electronic transfers occur immediately, there’s always a degree of risk when leaving a time- critical transaction until the last moment. In this case, the delay arose because the transfer couldn’t be completed before the deadline and that, in my opinion, is a foreseeable consequence of initiating the process so close to the cut-off date. But in any event, when Mr W elected to become a customer at eToro, he would’ve had to agree to their terms and conditions. Those terms state: “We will process a valid and complete withdrawal request by the end of the following business day. Our processing may be delayed or declined if required under Applicable Law, including if we have an AML concern. We may, or may not be able to, disclose to you the reasons for such delay or rejection. Please note that once your withdrawal request has been processed it might take a few days for your payment processor to update the balance in your account, depending on your payment processors policy and procedures.” And, on eToro’s website, it provides further clarification about when consumers can expect to see any withdrawal proceeds. Depending upon where the funds are remitted to, whilst many payment methods see the monies arrive within two business days, in some instances it can take up to five business days. So in light of the fact that Mr W wanted to transfer the monies to his bank account held elsewhere, that would typically take five business days which meant that the monies wouldn’t have reached his ISA in time for the end of the tax year had he elected for that option and not followed the advice of eToro’s helpline assistant. And in any event, from what I’ve seen, none of the options that eToro offer provide any guarantee of an instantaneous transfer. In light of this, I don’t think it’s fair or reasonable to instruct eToro to refund any future tax liabilities that Mr W may incur as a consequence of the technical issue.

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So, whilst the temporary failure of the payee functionality undoubtedly created inconvenience and required Mr W to take additional steps, the evidence shows that none of eToro’s withdrawal routes offered a guaranteed ability to transfer funds to an external ISA in time for the 5 April 2025 deadline. eToro’s own terms indicate withdrawals may take up to one business day to process and up to five business days to arrive, depending on the payment method. In these circumstances, the missed ISA deadline was already a foreseeable risk at the time Mr W initiated the transfer on 4 April 2025, and the technical fault did not materially remove an outcome that was otherwise reasonably achievable. I appreciate that Mr W has suffered some degree of inconvenience and frustration. When he attempted to undertake the transfer, given the system problems that eToro were experiencing, he wasn’t able to do what he wanted without having to engage with their customer service team. However, eToro were able to provide a workaround for Mr W to enable him to organise his transfer and the payment was sent to his bank account by wire transfer on 5 April 2025 (the last day of the tax year). eToro have offered Mr W an apology and $150 in recognition of the inconvenience that their transfer functionality caused. eToro say that they used USD in their offer to Mr W (rather than GBP) as that’s their platform’s base currency. When I consider that offer (approximately £110), I am of the opinion that it is fair and reasonable and not out of line with what this service typically asks firms to pay in such circumstances. Mr W argues that his estimated future capital gains tax of £240 is a predictable financial consequence. However, such a figure depends on future market performance, personal tax allowances, holding periods and trading behaviour, all of which are inherently uncertain. This service doesn’t generally award compensation for hypothetical or future tax liabilities that have not yet arisen and may never arise. For these reasons, I do not consider the claimed £240 to represent a direct, quantifiable loss caused by eToro’s error. For completeness, I will comment on why I have ‘upheld’ Mr W’s complaint. I appreciate that it may seem inconsistent that I have upheld his complaint but not required eToro to pay Mr W any additional compensation. However, upholding a complaint simply means the firm did something wrong; in this case, the temporary system failure. It doesn’t automatically mean that financial redress is justified. My role is to decide whether eToro’s mistake caused a loss that requires compensation beyond what has already been offered. For the reasons explained above, I’m satisfied that the $150 already offered fairly reflects the inconvenience caused and that no further loss has been established. My final decision eToro (UK) Limited have already made an offer to pay Mr W $150 to settle the complaint. I am of the opinion that this offer is fair and reasonable in all of the circumstances. So, my decision is that eToro (UK) Limited should pay Mr W $150 if they’ve not already done so. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 27 April 2026. Simon Fox Ombudsman

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