Football news - Football Index customers reportedly left facing large losses and reduced dividends
Football betting customers have suffered large losses on the Football Index website. The company, valued by some at almost £50 million, has reduced the payments it will make to those who own a form of shares that represent players in the Premier League, and there is no guarantee of customers making back their money.
Bruno Fernandes of Manchester United during the Premier League match between Crystal Palace and Manchester United at Selhurst Park
Betting website Football Index has reportedly left its customers suffering from big losses and reduced dividends after changes to the site’s terms and conditions.
The Observer initially reported in January that the website had seen the prices of players undergo big drops which had caused its customers losses, but there appear to be further problems with the website and its payment levels.
Football Index allows its customers to invest in shares that offer dividends for players based on their performance on the pitch and media prominence off it. The more players do well by those metrics, the better investors are paid in the form of dividends, which puts up the prices of the players as a result, which can then in theory be sold to other clients on the site.
Football Index announced that the site would be reducing the level of dividends paid for each player, which caused a rush for investors to sell their shares. That left many players worth as little as a couple of pence, with some given a valuation of zero. While the market has settled - Bruno Fernandes moved from £7.20 to around £1.54 - the price drops are still well over two-thirds of their previous value.
Dividends have been reduced from a maximum of 14p to 3p per player share.
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Will customers get their money back?
There is no guarantee offered by Football Index that investors will ever get their money back. In addition, the site said that “any cash balance held by an account” would have “no guarantee that all funds will be repaid.” Further, the money invested in player shares, “is not stored in any account or otherwise protected as they are sums at risk.”
The Observer also notes claims that users have lost sums up to £32,000, with £250,000 reportedly invested by a single customer.
Why did Football Index make the decision?
It is likely that the money generated by users was not enough to cover the dividends the company were paying out.
A spokesman said that, “our decisions have been guided by a desire to help customers achieve the best outcomes and receive the best possible returns while also having the long-term sustainability of the business front-of-mind.
“Yields had become unsustainably high compared to the level of activity on the platform”, and so the choice to reduce dividends was, “an unfortunate but necessary one.”
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