LONDON, Jan 29 (Reuters) - Retail foreign exchange broker IG Group has offered some clients in Germany discounts on debts incurred in the turmoil that followed Switzerland’s removal of a cap on the Swiss franc, two clients told Reuters.
One, a 26-year-old student and web-developer who saw his 300 euro ($340) investment on the euro against the Swiss franc turn into a debt of 7,000 euros in less than an hour, said he had been offered a 25 percent discount -- 1,750 euros -- from the firm’s Dusseldorf office, still leaving him owing 5,250 euros.
Phoned twice by Reuters on the issue on Wednesday and Thursday, a spokesman for IG Group said only that the group was following normal processes for reclaiming debts owed to it.
Another client, an engineer who is also 26, was left with a debt of 280,000 euros after betting just 8,300 on the euro against the Swiss franc. He said he has been offered a “not too bad” deal though he did not want to disclose the amount, and that those with larger losses were being offered more.
“They said, for example if you owed 1,000 euros and you had to pay 5 percent back, that would just mean that you only had to pay back 50 euros,” he said, explaining that would not be enough to teach a client to be more cautious, whereas 5 percent of a much larger amount would be enough to make a difference.
“They want us to learn something. They don’t want us to do something like that again, probably.”
IG is one of only a handful of retail brokers seeking payment from individuals whose trading accounts ran into the red in the chaotic minutes after the removal of the franc cap by the Swiss National Bank on Jan. 15.
Earlier this week the FTSE 250 company said it was seeking payment as it always did, “as promptly as possible”, from a group of 327 clients who had debts worth more than 17 million pounds ($26 million).
Several of the IG clients have told Reuters they were considering ways of challenging the losses. Bankers say that the problems of retail brokers like IG with small individual clients mirror similar discussions between major banks and some of their biggest clients over the Jan. 15 trades. (Reporting by Jemima Kelly; editing by Patrick Graham and Ruth Pitchford)