Loss due to brokers technical glitches can be refunded. You just have to fight for it.
At some point of time as a trader we lose money due to technical glitches. I think everyone can agree it’s the worse form of loss, nothing feels worse than that, because we can manage risk in markets but how the hell do you manage this severe technical operational risk which is always lingering. In recent time, the frequency of these glitches have increased manifold and hence the operational risk has sky rocketed. Markets alone are dangerous place and on top of that we retailers also face major operational risk where we just feel helpless and can’t do anything. In worse cases, we can even lose all our capital not because of markets but because of technical issues such as brokers down at crucial time and market moved rapidly against you.
Mostly these brokers simply don’t feel the need to be accountable for all these. Imho they should be accountable morally and legally as well since their business is to ensure our communication with exchange is fluid no matter what, that is what we pay for and they are brokers for a reason. But I think many brokers think they are just some tech company who have made some interface and platform and that’s it, all other risks should be pushed on to us the retailers, which doesn’t make any sense. Their primary objective is to ensure we can communicate to exchange at all time when markets are open. That is their PRIMARY SERVICE. They are into business of finance and not just tech, so the onus should be on them. For ffs their profits are 50% of the revenue which is insane and they better give us a good service or if not, any loss due to them or their platform should be refunded back to retailers.
So how does one get their money back?
Understand that when you lose money due to broker, you have essentially lost money because your broker has failed to provide you the service you signed up for and this can easily stand in your favour in the court. Brokers will tell you that you signed up documents stating broker is not responsible for loss due to technical issue. But this statement isn’t binding since the agreement is one sided. So don’t be afraid of this statement and go ahead and fight your case.
Follow these steps.
Step 1- Record the issue at the time it’s happening, have all screenshots, video recording explaining the tech issues, your order book etc. It’s very important since they can always delete it later from their backend. (Happened recently with someone)
Step 2- Raise a ticket with your broker first, tell them you lost money because of technical issues on their hand and they better refund the money. Most likely they will like to reach a settlement amount by refunding just 40-50% of the actual loss. Do not budge, fight for full refund. If they refuse, follow and escalate it within their team first and even then if they refuse, file a complain with SEBI
Step 3- File your complain to SEBi on scores.gov.in
Step 4- Upon filing complain, the exchange (NSE/BSE) will cordinate and mediate the matter with you and your broker.
Step 5- Even then if your broker doesn’t give your money back, the exchange will guide to as to further procedure. Further procedure will be to file a case with GRC (Grievances redressal committee). This will be like a court hearing and very professional where both party put their points infront of committee. So be very thorough and vigilant and raise your points well.
Step 5- Even if GRC fails, it’s not all over. You can fight further and you will be guided by exchange. You can go all the way till supreme court to fight your case if it’s not your fault. There are high court cases regarding this matter where the judgement was in favour of the retailer.
You can listen to this space where this guy fought and got his money. What is interesting is company as big as zerodha with 3000 cr of profit outright denied any refund of meagre ₹8000 and the case went on till GRC. So you can see their intentions, they just don’t want to be responsible or accountable EVER. They just want easy money where their turnover is x crores and profits 0.5x crores every year. So if such a big company can fight for 8k, you better fight for your hard earned money lost due to these unaccountable pricks. Why do I call them pricks? Because peak margin penalty is a penalty levied on brokers, but guess what they push this penalty on us retailers which is illegal. So you see, they just don’t want any responsibility or accountability and more over will push all the cost and risk on you.
Following is the link to the space. What I have written above is the summary of this space itself.