Where a funded-account breach dispute can go

A funded or evaluated trading account has been closed against a rule, you think the rule was applied wrongly, and you want to know who can be asked to look at it. There are several answers, they are genuinely different from one another, and each of them asks a question about you before it asks anything about what happened.

WHAT THIS IS — AND WHAT IS NOT PUBLISHED. General information, not legal advice: this describes the structure of the routes, not what you should do about your situation, and nobody here is qualified to tell you that. It describes the law of England and Wales as I read it on 5 August 2026; that law changes, so every provision is named rather than paraphrased, and the citations at the foot of this page go to the primary source so you can read the current text yourself. I have measured and published nothing about prop-firm outcomes — no breach rates, no dispute success rates, no firm-by-firm comparison, and nothing about what any programme charges — and no such figure appears on this page. This page names no firm and describes no firm’s terms. Rules differ between firms and between programmes at the same firm; where this page and your own documents disagree, your documents are the fact. Status of my own measurements: NOT YET COMPUTED. Hadal carries no affiliate links and takes no commission from any firm.

The Standing Gate

Every forum decides two things in order. First, may I consider this at all — is this the kind of dispute I handle, are you the kind of person I handle it for, is the other party the kind of party I have power over, and are you in time? Only after all of that does anything begin on the question you actually came with, which is whether what happened to you was right.

Call the first question the Standing Gate. Almost everything written about disputes of this kind is written about the second question, and almost every dispute of this kind ends at the first.

That is not a counsel of despair; it is the opposite. Gates are checkable in advance. You can establish, before spending anything, whether a route is open to you — and the ones that turn out to be open are then worth real effort, while the ones that are shut were never going to reward it however strong the merits. What follows is the gate on each route, stated as plainly as I can manage.

One deliberate omission, and the reason for it. This page names no amounts — not the connected-lender thresholds, not the Ombudsman’s award limit, not court fees. Two reasons, and the second is the stronger. The first is staleness: the Ombudsman’s limits are re-set every April, so a figure reproduced here becomes false while the page goes on looking authoritative. The second is anchoring. An award limit is a ceiling on what an ombudsman may award across every complaint it handles, not an estimate of anything; printed next to a dispute about an evaluation fee it invites an expectation wrong by orders of magnitude, and a reader who forms that expectation makes worse decisions than one who has no number at all. Each route below names the provision instead. Read the figure at the source, on the day you need it.

Before the routes: two things that decide most of them

First — the clock you are most likely to lose is the shortest one. The routes below are set out by structure, not by urgency, and those orders are opposites.

The legally strongest route runs on a limitation period measured in years. The fastest one, chargeback, runs on a card scheme’s own deadline measured from the payment, not from the day the dispute arose or the day you found out — so it can be most of the way gone before anything went visibly wrong. The deadlines differ by scheme and by dispute type, and this page will not print one, because a number that is right for one card and wrong for another is worse than no number. Ask your own bank, in writing, what deadline applies to your card, and raise the dispute while you are still working the rest of this out. Raising it early costs nothing and forecloses nothing.

Second — nearly every route asks whether you are a consumer, and the tests are not the same test. Ombudsman eligibility, the consumer jurisdiction rules for the courts, the protection against a foreign governing-law clause, and even whether a credit agreement is a regulated one all turn on some version of that question. The Consumer Rights Act frames it as acting for purposes wholly or mainly outside your own trade, business, craft or profession.

That is a genuinely uncomfortable question here, and it should be faced early rather than late. Someone who paid a fee to enter an evaluation in order to earn trading income, who used a business card, who declared a business purpose, or who contracted through a company may fail more than one of these at once. I found no authority settling how that question comes out for arrangements of this kind, and this page does not assert an answer — it flags that it is a live question, load-bearing for most of what follows, and much better identified now than after a fee has been paid. Note one point in the other direction, because it is easy to assume the worst: having been categorised by a firm as an “elective professional client” does not by itself remove Ombudsman eligibility, since the Handbook disapplies that exclusion for a complainant who is a consumer in relation to the activity.

Route one: the agreement itself

Almost every agreement of this kind describes a way to raise a complaint, and it is worth using first — not because it is likely to be sympathetic, but because of what it produces. Later routes are frequently gated on having asked the other party first and on what they said back. A written response, or a documented absence of one, is the thing that opens doors elsewhere.

The gate: none, beyond the agreement’s own terms.

What it decides: whatever the other party decides. What it does not: anything binding on them.

Route two: is the counterparty regulated at all?

The answer determines whether a whole family of routes exists, so it is worth answering early and precisely.

In the United Kingdom, carrying on a regulated activity by way of business requires authorisation or exemption — that is the general prohibition in section 19 of the Financial Services and Markets Act 2000. Whether any particular arrangement is a regulated activity is a three-part test under section 22: a specified activity, carried on by way of business, in relation to a specified investment. All three limbs have to be satisfied.

This page will not tell you how that test comes out, and you should distrust any page that does. It is fact-specific — it turns on what the firm actually does, on what the account actually is, and on the terms of the specific contract. What is squarely available to you is the fact rather than the inference: the Financial Conduct Authority publishes the Financial Services Register as the official public record of authorised firms, and you can search the exact legal entity named on your contract. Two cautions the FCA states itself: the entity on your contract may not be the entity whose brand you dealt with, and an authorised firm’s permissions may not cover the activity you were sold — a firm being listed is not the end of the enquiry.

The FCA separately publishes a Warning List of firms it believes to be operating without authorisation, which is also free to search. Its own caution about that list is the one worth carrying: a firm’s absence from it is not a clean bill of health, because the list records firms the FCA has warned about rather than every firm it has not. Both lists are searched against the exact legal entity on your contract, and neither returns a verdict on your dispute — they return a fact that determines which of the routes below exist for you at all.

The consequence of the answer is significant. The compensation scheme covers customers of authorised firms that fail; there is no claim against it where no authorised firm is involved. Where a firm has carried on a regulated activity without authorisation, sections 26 to 28 of the same Act make certain agreements unenforceable against the other party and provide for recovery — but that is a route with its own conditions and a judicial discretion inside it, not an automatic refund, and it belongs to someone qualified to advise on it rather than to a page like this one.

The gate: the counterparty’s own authorisation, as a checkable fact about a named legal entity.

Route three: your own bank, by chargeback

Here is the route most people reach for, and the one most widely misdescribed.

Chargeback is not a statutory right — the FCA states this expressly. It is a process under the card schemes’ own rules, and it runs between two banks. Your bank raises the dispute; the merchant’s bank may defend it; and only where the two cannot resolve it between them does the scheme itself adjudicate. You are not a party at any stage of that. Under the published scheme rules only a member bank may appeal an adjudication, so there is no consumer appeal at the end of it, and no regulator adjudicating individual payment disputes behind it.

None of that makes it a bad route. It is often the fastest that exists and it costs nothing to ask. It does mean three practical things: the deadlines are the scheme’s rather than the law’s and differ by scheme and by dispute type, so check yours with your own bank rather than against a number found online; the only lever you hold is the quality of the evidence you hand your bank to carry; and a refusal by your bank is not the end, which is the next route.

The gate: paying by card at all, and the scheme’s own time limit.

What it decides: whether the payment is reversed. What it does not: anything about whether your account was closed fairly.

Route four: your credit card issuer, as connected lender

Where the payment was made under a credit agreement, section 75 of the Consumer Credit Act 1974 makes the creditor jointly liable with the supplier for misrepresentation or breach of contract. This is a legal claim against your own card issuer, and it is a materially stronger instrument than chargeback because it rests on statute rather than on a private rulebook.

Two things people routinely get wrong, in opposite directions.

The first is the belief that it cannot apply because the supplier is abroad. That argument was run by the card issuers themselves and lost: in OFT v Lloyds TSB Bank plc [2007] UKHL 48 the House of Lords dismissed their appeal. A foreign supplier is not, in itself, the obstacle.

The second is assuming it applies to any card payment. It does not. It requires credit — a debit card payment involves no credit agreement and is outside the section entirely, and there is a carve-out for certain running accounts repayable in full each period. It also requires the cash price of the single item to fall inside a band with both a floor and a ceiling, set by section 75(3)(b).

The floor is the gate to check before any other, and the one this page most wants you to go and read for yourself. It is low enough in absolute terms that a single modest fee can fall under it, and where it does, the route is closed before anything about the merits arises. I have measured nothing about what programmes of this kind charge and assert nothing about it — the only figure that decides this is the one on your own receipt, read against the subsection. Two details of that subsection reward precision rather than paraphrase: the boundaries are not symmetrical, so the exact amounts at each end fall on opposite sides of the line; and the test is the cash price the supplier attached to the item, not the amount you happened to put on the card. Part-paying by credit card does not shrink the item’s price for this purpose.

The gate: a credit agreement, a cash price inside the statutory band, and the ordinary limitation period.

Route five: the Ombudsman — but read the respondent, not the topic

The Ombudsman route is where the flat, confident, wrong sentence usually appears: there is no ombudsman for this. It is wrong because it reasons from the subject matter.

Ombudsman jurisdiction attaches to the firm being complained about. Under the Handbook’s dispute-resolution rules and section 226 of the Financial Services and Markets Act, a complaint qualifies by reference to the respondent’s status, assessed at the time of the act complained of rather than at the time you complain. So where your counterparty is outside that perimeter, a complaint about it goes nowhere — and that much of the flat sentence is right.

But “not on the Register in its own right” and “outside the Ombudsman’s reach” are not the same finding, and the difference is worth a search rather than an assumption. The dispute-resolution rules extend to complaints about a firm’s appointed representatives, and about agents of payment institutions and electronic money institutions — none of which are authorised in their own name. An entity that returns nothing when you search it may still be acting as somebody else’s appointed representative or agent, and the terms you were given are where that relationship, if it exists, would be disclosed.

But your bank or card issuer is a different respondent, and is within it. If your bank declined to raise a chargeback, or discontinued one, or rejected a connected-lender claim, how it handled that is itself a complaint about a regulated firm, and it is one the Ombudsman can consider.

Read the boundary of that carefully, because it is narrower than people hope: the Ombudsman is deciding whether your issuer acted fairly, not whether your account was closed fairly. Any outcome runs against the issuer.

Three gates, all of which are ordinary and all of which end complaints daily. You must be an eligible complainant — broadly a consumer, with separate tests for micro-enterprises and small businesses, which is worth checking if you contracted through a company. You must complain to the firm first and give it its response period. And you are subject to time limits, of which the one that does most of the killing is the short window that runs from the firm’s final response — much shorter than the outer limits, and easy to let pass while deciding what to do. A determination binds the firm only if you accept it, and accepting closes off going further.

The gate: a respondent within jurisdiction, eligibility, complaining to the firm first, and time.

Route six: the courts, and the two problems

Available, real, and carrying two obstacles that are usually discovered in the wrong order.

Small claims is a track, not a court. In England and Wales a money claim is brought in the County Court, and allocation to the small claims track is a judicial decision under the Civil Procedure Rules, not something you select. It is designed to be usable without representation and costs recovery is limited, which cuts both ways.

The first obstacle is jurisdiction. Whether an English court can hear a consumer’s claim against a trader based abroad is governed, since the end of 2020, by rules the UK re-enacted for itself — the consumer provisions inserted into the Civil Jurisdiction and Judgments Act 1982 — rather than by the European regime that preceded them. Those provisions can let a UK-domiciled consumer sue where they live, but only where the contract meets that Act’s own definition of a consumer contract, which for a business contracted with from abroad turns on whether it directed its activities at the United Kingdom. That is a condition to establish, not an assumption to make, and it is separate again from being permitted to serve the claim form on someone outside the jurisdiction. Two instruments commonly cited as the answer are not: the 2005 Hague Convention on choice of court agreements expressly excludes contracts to which a consumer is a party, and the 2019 Convention governs recognition of judgments rather than which court may hear a case. Note too that the online claim service is not available where the party you are claiming against has no address in England or Wales; that route is the paper one, with service abroad as a separate step from jurisdiction.

The second obstacle is that a judgment is not money. Where the other party has no assets, branch or establishment in this country, enforcing an English judgment where they actually are is a fresh problem in a different legal system. This is the one most worth understanding before spending anything, because the cost is incurred at the start and the difficulty arrives at the end.

Two clauses in your agreement bear on all of this. A foreign governing law or forum clause is not automatically effective against a UK consumer — the Consumer Rights Act 2015 restricts that where the contract has a close connection with the United Kingdom, and a term hindering the consumer’s right to take legal action is on the Act’s indicative list of potentially unfair terms. But indicative means assessable, not void; nobody can tell you the answer without the term and the circumstances in front of them. An arbitration clause is treated similarly: the Arbitration Act 1996 applies the consumer fairness regime to it whatever law governs the clause itself, and below a threshold amount specified by order an arbitration term is automatically unfair, while above it the clause is merely assessable under the general test. That threshold has not moved since it was set at the beginning of 2000, and — worth saying, because the recent legislation invites the opposite assumption — the 2025 reform of arbitration law repealed the domestic agreement provisions and left the consumer ones standing.

What none of these decide

Not one of these forums determines whether the rule you were held to was a reasonable rule. They ask narrower questions: was the payment reversible, was the creditor jointly liable, did your bank act fairly, is this contract enforceable and where. A reader arriving with the feeling this was not fair is arriving with something none of the routes is shaped to receive.

That is worth knowing early, because it changes what is worth assembling. What every route can use is something specific: a documented, arithmetic discrepancy between what the rule says and what the record shows. What none of them can use is a general sense of grievance, however justified.

And that specific thing is the one part of this entirely within your control. Given the rule text and your own account record, whether the stated rule applied to your numbers produces the recorded outcome is a closed question with a definite answer, and it requires nobody’s cooperation to reach. Where the rule text will bear more than one reading, it can be computed under each. What that record cannot establish — intent, whether a quote was fair, what would have happened otherwise — is set out in what a trading statement can prove, and knowing which of the two you have is worth more than any amount of confidence about the first.

Where to start

Before anything else, establish which condition actually fired and whether the consequence was terminal: what a funded trading account breach means sets out the taxonomy, and the difference between a hard breach and a soft breach changes what you are disputing. If a drawdown floor was involved, work out which drawdown rule you have — static and trailing are five architectures rather than two, and the phrase in an agreement does not say which applies. If the account closed while the position was in profit, that has a specific mechanism: why an account can be breached while closing in profit.

Then check the gates, cheapest first: which legal entity is actually named on your contract, whether you paid by credit or by debit, what the cash price of that payment was, and what date any final response from the other party carries. Those four facts open or close most of the routes above between them, and all four are answerable this afternoon at no cost. If a card was involved at all, ask your bank the deadline question in the same sitting — that clock started at the payment and it is the only one on this page that may already be running out.

If you would rather have the arithmetic behind the breach reconstructed from your own account record than do it yourself, that is Prop-Breach Forensics; where a payout was reduced or refused rather than an account closed, Payout-Denial Recompute. Neither produces a legal opinion, neither contacts anyone on your behalf, and neither is a route in the sense used above — they produce the specific, checkable discrepancy that the routes can actually use.