A 15-year gambling addiction, initially sparked by a casual conversation about currency trading, led Grant Davies to lose over £120,000 through high-risk trading platforms. Davies, now 48, described his journey from a £300 spread bet on the S&P 500 in 2009, which yielded a £600 profit in minutes, to a devastating financial and personal crisis.
Spread betting, a method of speculating on price movements without owning the underlying asset, is characterized by leverage, which magnifies both potential gains and losses. IG, a prominent UK trading platform, warns that 69% of its retail investor accounts lose money on spread bets and Contracts For Difference (CFDs). Davies became trapped in a cycle of trying to recoup losses, which escalated with his use of binary options, a type of financial contract banned in 2019 by the Financial Conduct Authority for being akin to gambling products.
Davies' financial situation deteriorated, leading him to miss essential bill payments and accumulate credit card debt. He temporarily ceased trading after the birth of his second child in 2017. However, in 2018, an email from IG offering him a chance to apply for a professional account reignited his addiction. These accounts, meant for experienced traders, remove key retail investor protections and offer higher leverage ratios. Davies was approved for this account within three hours, a process he later contended should not have happened given his qualifications.
With the professional account, his losses rapidly intensified, culminating in over £120,000 lost in six years. This plunge into debt, amounting to £45,000 through loans and credit cards, forced him to conceal his habit from his wife, Melissa, and family. The facade crumbled in June 2024 when a missed mortgage payment due to depleted salary revealed the extent of his losses.
Facing the crisis, Davies entered a month-long rehabilitation program in the summer of 2024. During his recovery, he investigated the circumstances of his professional account, leading him to seek redress. With assistance from the corporate intelligence agency Red Mist, Davies pursued a complaint against IG with the Financial Ombudsman Service (FOS). After nearly two years, the FOS ruled in his favor in May, determining that the professional account should not have been approved and that IG's oversight was insufficient. The ruling ordered IG to pay Davies three-quarters of his £120,000 losses, over £90,000, plus £500 for distress and inconvenience. IG stated that applications for professional client status are assessed against regulatory criteria and information provided at the time of application, and declined to comment on individual client matters or legal proceedings.