of course dealers cheat everyone in the industry knows that. Its just less blatant than it used to be. proving it is a different matter though and their T&C's basically say they can do what they want. The FCA would never investigate as politically they cant handle any more scandals.
I don't think any legitimate spreadbet firm would resort to cheating, they just don't need to. I'll try to put my point across...
The main difference between the small sb firms and the IG's of this world is the depth of their risk book and the size of their client base.
It's no secret most s/b clients lose, its one of the reason that so many sb firms offer 'free money' promotions because ultimately they know the client will lose it and actually cost very little in terms of acquisition ! (although these type of promotions are quite probably about to be made to stop). It is otherwise very expensive to acquire clients but once the sb firm has the client they have a good chance to capture most of the clients loss. how much of the clients total loss depends on the size of their risk book. IG for example are big enough to warehouse risk that may capture 95%+ of all B book losses. A mid size s/b firm may only be able to run enough risk to capture 90% of the B book loss.
The smaller companies will either run very small risk or offer the no dealing desk model whereby instead of making money by capturing a loss, they make money by the difference in spread between the client dealing and their hedge against it.
Cheating doesn't really come into it because s/b firms know they don't need to interfere with the clients trading behaviour, they know the client is likely to inflict enough damage on themselves. the only factor that may influence this is how quickly each particular spreadbet firm tries to capture the loss.. some may be happy getting it in 6 months whilst some may want to do it all in 3 months. Its the one's who try to do it quickly who you find are the more shall we say aggressive in their approach to how they interact with their clients. The bigger ones are hot on customer service and try to be approachable and accountable.
Bear in mind there isn't much more than 10 s/b co's and with the exception of the ones that have gone (Cantor Index, MF Global, WorldSpreads) they all seem to make enough to keep going. MF Global and WorldSpreads went because ultimately they didn't have enough clients losing enough money that they had to break the rules to buy time. They got found out in the end and the FCA and FSCS done a good job in making sure that people got most of their money back - there can be no argument that the deposit guaranty works well enough.
I understand there is a them versus me mentality and that trusting the s/b firm can be difficult when you think too many incidents are conspiring against you but quite honestly there isn't any reason other than capturing the loss quicker to do anything untoward as the sb firm will likely get it anyway soon enough.
