Troubled trading firm Plus500 told us today that it has unfrozen over 8,000 customer accounts in the three weeks since the financial watchdog told it to stop everything and fix its security protocols.
London-listed Plus500, which lets people make risky, leveraged bets on stocks and currencies they don’t own, was forced to freeze thousands of accounts at its UK subsidiary after the Financial Conduct Authority (FCA) regulator told the company its anti-money laundering procedures weren’t up to scratch. As well as overhauling them, the company is in the process of re-verifying every UK customer identity to make sure no one dodgy slipped through.
Despite the progress, there are signs that the process itself is stretching the company to capacity.
One anonymous customer reached out to Business Insider to say Plus500 accidentally closed their UK account and opened a new one at its Cyprus regulated subsidiary. Here’s the email they were sent from Plus500, with the name redacted:
Plus500 blames a “technical issue” for the error in the email. The company is letting customers registered on the UK platform but based elsewhere in the world switch over to the Cyprus platform if their accounts are empty. Sources close to the company suggest this process may have had something to do with the mix-up.
As you can see from the email, sent yesterday, the account switch was corrected. But it doesn’t instill confidence at a time when Plus500 is supposed to be fixing issues of oversight and regulation of systems.
Plus500’s competitive advantage has always been based on its automation-heavy model, according to industry insiders, but that is now being stretched by the FCA’s demands.
On top of the account glitch, the anonymous client who reached out to Business Insider says they have provided identification documents twice now, despite the email saying they still need to provide them. Several other customers Business Insider spoke to have complained of having to provide documents multiple times.
Plus500 said it doesn’t comment on individual cases.
Plus500 is currently in the process of being sold to gambling software company Playtech. Plus500’s share price collapsed after news of its account freezes broke and Playtech took advantage, swooping in with a lowball bid last week.
Business Insider Emails & Alerts
Site highlights each day to your inbox.