Investengine (UK) Limited · DRN-6061223

The complaint Mr J complains Investengine (UK) Limited (‘Investengine’) unfairly froze his account. What happened Mr J opened a stocks and shares ISA with Investengine in March 2025. He funded it with around £20,000 via a transfer from another ISA provider. Mr J says that on 17 March 2025 he received the funds in his Investengine ISA and sought to make an investment, but due to limitations in the way he could make purchases on Investengine’s platform he decided not to continue investing and tried to take his funds out of the ISA. He says he sought to withdraw the funds rather than request another ISA transfer because an ISA transfer would take weeks. The rapid movement of recently transferred ISA funds triggered an alert in Investengine’s internal transaction-monitoring system. Investengine carried out a review and found also that Mr J’s account was missing some client information. It blocked Mr J’s withdrawal and placed a temporary restriction on his account. On 18 March 2025 Investengine asked Mr J to provide identity documents, a bank statement and information showing the source of his wealth (which, depending on where his wealth came from, could be any of the documents listed as examples by Investengine). On 25 March 2025 Investengine sent its information request again. Mr J said: ‘I don’t have time for this and am not impressed by the lack of control over purchase time and price so probably don't want to stay with Investengine anyway. What are my options? I'm guessing either close my account and send the money to my nominated account or send the money back via ISA transfer to the previous ISA provider?’ Investengine replied the same day saying that to leave Investengine he could either withdraw the money from the account or request an ISA transfer to his original ISA provider or another ISA provider. But it said before that could happen Mr J needed to provide the information Investengine had requested because his account had been restricted by the compliance team which meant no transactions could take place until Mr J provided the requested information. Mr J replied saying Investengine couldn’t do that because it had no evidence of suspicious activity. He said Investengine should’ve done the necessary checks before accepting his money. And he wanted his account closed and the funds paid to him, and he intended to bring the matter to this service and also write a negative review of Investengine. On 31 March 2025 Mr J made a complaint to Investengine. Investengine told him on 1 April 2025 that it had logged the complaint and he’d receive an acknowledgement email shortly. Mr J says he subsequently submitted an ISA transfer request to another provider and Investengine refused the request due to the names not matching on the Investengine ISA

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account and the transfer request from the other provider. Mr J’s Investengine account included only his first initial rather than his first name. Mr J asked Investengine to update his name on its system and Investengine said it would do that if he provided an identity document and selfie. Mr J requested an ISA transfer to the provider that had transferred his ISA into Investengine. The other provider told Mr J Investengine had rejected the transfer request because the name on the request didn’t match the name on the Investengine account. Mr J said the names were the same now as when Investengine accepted the transfer from the other provider. And if the names were a problem then Investengine shouldn’t have accepted the original ISA transfer. Investengine said that for an ISA transfer it was the ceding party that checked the information. On 14 May 2025 Mr J provided the identity verification information Investengine had said it needed to be able to change the name on his account. He told this service he provided the information ‘out of desperation and false hope’. Before doing so he asked Investengine if it would guarantee to facilitate his ISA transfer if he provided the identity information. Investengine said it would ‘prioritize the transfer process’ if it could verify his identity. Investengine accepted the information and changed the name. Mr J then requested an ISA transfer, but Investengine said it still needed the information it had requested from him before the transfer could go ahead. Between March and July 2025 Investengine requested the information from Mr J nine times but it didn’t reply to his complaint. And on 2 July 2025 he referred the complaint to this service. He gave this service a detailed account of events and his view of those events. In summary he said Investengine was wrong to ask him for the information it had requested. He said that apart from identity verification evidence he didn’t provide any information in response to Investengine’s requests because he didn’t trust Investengine with his personal data due to what he viewed as unprofessional, dishonest conduct on its part, and because the source of wealth was subjective and difficult to prove, and he’d read bad reviews about Investengine online. He also said Investengine was using compliance issues as an excuse to retain his money, and it had restricted his access to the money for longer than it was legally allowed to do. In describing how he was impacted by Investengine’s actions Mr J said that for a number of months he’d lost the use of £20,000 which he’d urgently needed, and he missed out on about £350 in earned interest. He said he experienced considerable distress due to the prolonged restriction and poor communication by Investengine and it affected his health. On 29 July 2025 Investengine answered Mr J’s complaint. It said that despite being made on 31 March 2025 Mr J’s complaint was ‘not formally recorded or responded to until 29th July 2025’. For that failure it offered a goodwill gesture of £25. But it said it had acted in line with its regulatory obligations and its terms and conditions when it withheld Mr J’s funds while it awaiting information from him for its due diligence checks. One of our Investigators looked into Mr J’s complaint. He initially thought Investengine had unreasonably delayed releasing Mr J’s funds and he recommended Investengine pay Mr J 8% simple interest on the £20,0000 that he temporarily lost access to, and £250 for distress and inconvenience. However, Investengine provided further evidence including correspondence and internal records relating to its processes and the checks it made.

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The investigator issued a new view taking into account the further information. In summary he said Investengine had acted in line with its terms and conditions and its legal and regulatory obligations when it asked Mr J for information and restricted his account while awaiting that information. But he said Investengine had failed to deal with Mr J’s complaint in a timely manner and for that it should pay him £150 compensation. The investigator also noted that Investengine still hadn’t removed the block on Mr J’s account because it still hadn’t received information from him which it needed. Investengine accepted the investigator’s second view and said it would pay Mr J £150. Mr J didn’t agree. In summary he said the following: • It wasn’t high risk for Investengine to transfer his ISA back to the provider it had received the ISA from so Investengine shouldn’t have blocked the request to transfer back to that provider. And Investengine shouldn’t have accepted the transfer in the first place if there was an issue. • Investengine told him on 1 April 2025 that it had logged his complaint. Investengine later lied about not logging it to excuse the fact that it didn’t respond until this service was involved. There should be repercussions for this dishonesty. • Investengine’s internal notes said Mr J’s account showed ‘a large, recently transferred ISA deposit followed by an immediate full withdrawal request’. But before requesting the withdrawal Mr J had begun to make an investment and changed his mind because Investengine didn’t allow him to trade live prices. • Investengine breached the terms and conditions around the right to cancel, account termination and cash transfer in account closures. Under clause 21.4 (account termination) Investengine could’ve concluded the matter swiftly and to the satisfaction of both parties. • Investengine said once his name was updated it would prioritise his ISA transfer, but it then refused the transfer. • Investengine froze Mr J’s account for longer than it was legally allowed to do. It had legally notify the National Crime Agency (NCA) after 7 days or else return Mr J’s money to him or end its relationship with him. • The investigator had reduced the compensation he recommended even though Mr J now been unable to access his funds for 9 months. • Investengine would’ve been earning interest on Mr J’s money and that amount would’ve been more than the compensation it had to pay to Mr J which was unfair. The investigator considered Mr J’s response but didn’t change his view. In summary and amongst other things he said the following in response: • He’d agreed Investengine’s complaint handling had been deficient and he’d recommended compensation for that. • The legal provisions Mr J mentioned about time limits and court orders applied to specific law-enforcement-led processes, such as where a disclosure was made to the NCA and a statutory moratorium period applied. Those provisions didn’t mean a regulated firm was required to lift account restrictions or return funds while it remained unable to complete customer due diligence under the Money Laundering Regulations.

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• There was no evidence Investengine profited improperly from Mr J’s ISA funds, and even if it earned some commercial benefit from holding client cash, that didn’t of itself make the restriction unfair. • £150 for distress and inconvenience resulting from the shortcomings in how Mr J’s complaint was handled replaced the higher amount the investigator had previously suggested because his view of the complaint had changed after he took into account the further evidence that had been submitted. In January 2026 Investengine told this service Mr J had now provided information which satisfied requirements. And so Investengine had removed the blocks from his account. And it had now paid Mr J the £150 that the investigator had recommended. Mr J told this service he still wasn’t satisfied. In summary he gave the following reasons: • Investengine had breached regulations which required it to either making a disclosure or terminating its business relationship with Mr J if it was unable to complete due diligence. This had financially benefited Investengine by and been to Mr J’s detriment. And Mr J compared the restriction to an account freezing order which required evidence of criminality and a court order to be extended longer than six months. • Although Investengine had now lifted the restrictions on his account, Mr J was dissatisfied with its handling of his further attempts to transfer his ISA and its handling of a £50 bonus. • Investengine had drip fed information about the restrictions rather than explain everything upfront and that had caused delay. • £150 didn’t fairly reflect the amount, duration and frequency of the distress and inconvenience Investengine had caused Mr J, including because Investengine delayed for so long and because of the two instances of dishonest and misleading communication. Because no agreement could be reached, the complaint was passed to me to review afresh and make a decision. 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. Having done so, I’m not upholding the complaint. I’ll explain why. The purpose of this decision is to set out my findings on what’s fair and reasonable, and explain my reasons for reaching those findings, not to offer a point-by-point response to every submission made by the parties to the complaint. And so, while I’ve considered all the submissions by both parties, I’ve focussed here on the points I believe to be key to my decision on what’s fair and reasonable in the circumstances. If I haven’t mentioned something, that doesn’t mean I haven’t considered it. It’s not in dispute that Investengine’s handling of Mr J’s complaint fell short. For that Investengine has paid him £150 compensation. But Mr J says £150 is insufficient and he maintains that he should be compensated for the length of time Investengine restricted his

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account and for Investengine’s communications which he said were dishonest on two occasions. New points of dissatisfaction that Mr J raised about a further ISA transfer request and the payment of a £50 bonus are outside the scope of the complaint I’m considering here. So I won’t make a finding about those things. In relation to the information request and account restriction that Mr J complained about, I’m not persuaded Investengine treated him unfairly. As a regulated financial services provider Investengine has various legal and regulatory obligations to verify the identity of its customers and ensure it doesn’t facilitate money laundering and other financial crime. Generally speaking it’s for Investengine to interpret its legal and regulatory obligations and decide how it will meet those obligations. And having looked at the decision Investengine made to restrict Mr J’s account while it awaited information for due diligence purposes, I don’t see any unfairness in the way Investengine acted in pursuit of its obligations. Mr J said providing proof of wealth was difficult and any assessment of the proof would be subjective. But the obligation to investigate, in certain circumstances, the sources of its customers’ funds and wealth is a regulatory obligation for Investengine. So, even Mr J disagrees with having to provide evidence of those things, it wasn’t unfair for Investengine to request it. I don’t think the way Investengine administered that obligation was unfair or unreasonable. The requests made clear what Investengine was asking for, and for the source of his wealth they gave examples of documents Mr J could produce. I don’t consider the information was particularly unusual or difficult to obtain. And the fact is that, apart from his identity documents, Mr J didn’t offer any information for Investengine to consider. So I can’t say Investengine made the process too difficult or didn’t fairly assess the evidence. Mr J said he didn’t provide the requested information because he lost trust after Investengine refused his ISA transfer in May 2025 and mishandled his complaint. But Mr J declined to provide the information before those things had happened. And he made his complaint before those things happened. So I don’t find his reasons for refusal to be persuasive and they don’t give me a basis to say Investengine’s requests were unreasonable. Mr J said Investengine ought to have done its checks earlier in its relationship with him. But although Investengine could’ve gotten more information from Mr J at the outset so that client data wasn’t missing on his account, this wouldn’t have negated Investengine’s obligation to make checks when an alert was triggered by activity on his account. That activity wasn’t something Investengine could consider until after it happened. I’m aware Mr J says that – in between his ISA being funded and his request to withdraw funds – he began to make an investment in the ISA and then changed his mind. Even if an order was submitted and then cancelled, I don’t see that this would invalidate Investengine’s basis for due diligence checks on the account. The timing of events was such that Mr J’s account would still have shown he made a large deposit then requested full withdrawal very soon after. The interim steps he’s mentioned wouldn’t be enough for me to say Investengine acted unreasonably by seeking further information from him on the basis of his account activity. Investengine was still entitled to make the risk assessment it made. A key point here is that for the period of delay that he complained about Mr J didn’t provide any information in response to Investengine’s requests for information about the source of his money. Mr J spoke of being distressed and having an urgent need for the money he couldn’t access. He made frequent contact with Investengine and this service in an attempt to be given access. Yet for several months he provided nothing to Investengine to help it

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carry out the checks it said it needed to do. Even if he disagreed with Investengine’s approach, I’d expect Mr J to have attempted to mitigate his situation by attempting to give Investengine some information to help it satisfy what it regarded as its legal and regulatory obligations. Mr J cited excerpts from the legal framework within which Investengine operated and suggested Investengine had breached its obligations by restricting access to his funds for as long as it did. I will emphasise here that it’s not my role to make findings about whether Investengine has acted unlawfully or in breach of regulations. But I’ve considered whether, taking into account the legal and regulatory framework, Investengine has treated Mr J fairly. As has been said, Investengine had a range of legal and regulatory obligations to meet, as well as its own policies. I’m satisfied that none of those obligations imposed a time limit that meant Investengine couldn’t fairly continue to restrict funds for as long as it did in the particular circumstances of this complaint. And the provisions for account freezing orders, which serve a different purpose are made by specified entities such law enforcement agencies, don’t give me reason to say Investengine wasn’t entitled to act in pursuit of its own, separate and different obligations in the way it did. And although, by the time he referred his complaint to this service, Mr J hadn’t provided the information Investengine had requested, I don’t find it was unreasonable for Investengine to have thought at that point that he might still provide it, as eventually happened. In relation to Investengine’s message in May 2025 which told Mr J it would ‘prioritize the transfer process’ once the issue of mismatching names had been resolved – I understand why Mr J says this was misleading, but I’m not persuaded it was inaccurate and I see no basis to say it was dishonest. Investengine didn’t say it would complete the transfer without requiring anything further from Mr J, or that there would be no further issues to resolve. There are various reasons why ISA transfers sometimes cannot be completed. It would’ve been inappropriate for Investengine to ‘guarantee’ that Mr J’s transfer could reach completion when Investengine and the other provider were only partway through the process. And I think Mr J ought reasonably to have known that his transfer wouldn’t go ahead until he’d provided the information Investengine had asked for. When he told Investengine in March 2025 that he wanted to leave Investengine, and he asked what his options were, Investengine told him a transfer to his original ISA provider or a new ISA provider was an option, but before that could happen he’d have to provide information because his account had been restricted. Mr J attempted to achieve an ISA transfer anyway, without having provided the requested information. And even though Investengine’s 13 May 2025 email didn’t mention the other information Mr J would have to provide to release his funds, I think that, overall, Investengine’s communication was clear enough that Mr J ought reasonably to have known, from the outset and throughout, that Investengine required information from him before it would allow a withdrawal or transfer. Mr J said there ought to be repercussions for Investengine having dishonestly said it hadn’t logged his complaint. But it’s not the role of this service to punish a business for wrongdoing. This service looks to put right the impact of any unfair treatment on the business’s customer. In this case the issue of not responding to Mr J’s complaint – whether that was caused by not logging it correctly or by overlooking the fact it had been logged – is part of the complaint handling failure for which Investengine paid Mr J £150 compensation for distress and inconvenience. Investengine’s explanation for not responding to the complaint doesn’t warrant an additional award from me in this case. Overall, Investengine was within its rights to restrict Mr J’s account when it did. I don’t accept it wrongly deprived him of the use of his funds. Nor do I find that the way Investengine communicated with Mr J about his account was unfair or unreasonable. So it wouldn’t be fair for me to require Investengine to pay Mr J interest for having been deprived of his funds. And it wouldn’t be fair for me to require Investengine to compensate Mr J for any distress

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and inconvenience he experienced as a result of the information request or the account restriction. So on this occasion I’m not requiring Investengine to do anything. My final decision For the reasons I’ve set out above, my final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr J to accept or reject my decision before 13 April 2026. Lucinda Puls Ombudsman

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