Debt to Spread betting Company - Can they register a default with credit agency?

richto

I owe roughly £100 to a spread betting company (sporting index) from a sports bet. I am reluctant to pay them, because it was never made clear that I could owe more than i paid for the bet.

I understand that such debt is enforceable via small claims - but know that for such a small amount it would never be worth them doing so.

Now they have today sent me an email to me telling me that they will register a default with a credit reference agency if i dont pay them by the 15th (5 working days)

As far as I am aware i dont have a credit agreement with them - can they still do that?

I thought that there were also very specific requirements requiring them to write to me and give me specific notice prior to such a move?

DevCoder

Their imposed risk disclosure notice is fairly clear in that regard

http://www.sportingindex.com/spread-betting/information/risk-disclosure-notice

If the underlying market movement is in your favour, you may achieve a good profit, but an equally small adverse market movement can not only quickly result in the loss of your entire deposit, but may also expose you to a large additional loss unless you enter into a limited liability contract with the firm. If you deal on a credit basis and, therefore, not subject to initial margin requirements, the extent of your agreed credit facility does not limit your loss or financial liability and you can be subject to margin calls for an amount in excess of your facility
As a consequence the amount of capital you are prepared to place at risk should be sufficient to cover your credit limit and the possibility of subsequent margin calls which will only be made once your credit limit has been exceeded.

Mach4

You need to pay up. Sporting index are very clear that you can lose more than your stake. They can and will register a default against you.

Plus you made the bet and lost. If you'd won you would expect them to pay.

richto

Mach4 wrote: »

You need to pay up. Sporting index are very clear that you can lose more than your stake. They can and will register a default against you.

Plus you made the bet and lost. If you'd won you would expect them to pay.

They didnt make it at all clear that I could loose more than a bet which i paid for! i signed up on a deal thingy, and deliberately said no to a credit account, which as far as I was concerned was a 'limited liability contract'.

Anyway thats all i care about - If they can issue a default outside CCA (surely a legal anomally as default notices are regulated by the CCA) then I guess i have to pay up :-(

richto

krisdorey wrote: »

Their imposed risk disclosure notice is fairly clear in that regard

http://www.sportingindex.com/spread-betting/information/risk-disclosure-notice

That is a page of very small print legalese that i have never before seen. 'fairly clear' is a somewhat optimistic description.

Mach4

richto wrote: »

They didnt make it at all clear that I could loose more than a bet which i paid for! i signed up on a deal thingy, and deliberately said no to a credit account, which as far as I was concerned was a 'limited liability contract'.

Anyway thats all i care about - If they can issue a default outside CCA (surely a legal anomally as default notices are regulated by the CCA) then I guess i have to pay up :-(

Do you have experience of spread betting?
YesNo

Have you read the Risk Disclosure Notice and understood the level of risk that is involved?
YesNo

Do you understand that you can lose more than your initial deposit or credit limit?
YesNo

Just some of the questions that you have to answer to open a sporting index account. If you didn't know that you were opening a credit account then you were either wilfully unaware or really dont read questions.

richto

I DID NOT open a credit account. I very specifically declined that option, and my credit limited is stated as zero on their site.

I dont remember what boxes i ticked, but i certainly have no knowledge of spread betting. i bet about £50 (that I paid from my card) on Championship finishing places.

Gazza1964

Hi,

By credit account they mean you are betting on credit - as in you would balance your account at the end of the month.

This has nothing to do with losing more than your initial deposit and hence being in debt to them.

Pay them - they will not back down and it is not worth the damage to your credit file, unless you dont care.

Mach4

Ye just because they didn't give you a defined credit limit doesn't mean that you can't get into debt with them. All spreadbetting accounts have the potential to lose more than your stake. Even stop losses are not guaranteed unless you pay extra for them.

Spreadbetting firms are fsa regulated and they all make you select several options confirming that you know what you are getting into when you sign up.

You will have been credit checked to get the account so presumably your credit rating is currently ok. That being the case pay them and see it as a lesson learnt. Always read what you are signing up to.