The Gambling Commission has today (25 May 2021) provided an update on its Remote Customer Interaction Consultation (and accompanying Call for Evidence on “affordability thresholds and actions” for the remote gambling sector).
Although the Commission intends to proceed with a future consultation on “thresholds for operators to take action and guidance on what those actions should be”, this update serves to confirm comments by Sarah Gardner, the Commission’s Acting Joint Chief Executive, in her 20 May 2021 speech at the Shard Financial Vulnerability Summit 2021 entitled “Reducing risks, tackling harms”, in which she:
- described this as “a controversial and complex area” in which the Commission needs to “strike an appropriate balance between consumer protection and concerns about privacy and consumer choice” and
- went on to indicate that the Commission’s initial focus will be on cases where customer interaction failings relate to plainly obvious unaffordable gambling activity by customers, saying: “We will be taking the next steps towards introducing requirements on operators to take action at more appropriate levels. Our immediate action will be focussed on preventing the types of cases we still see too much of in our casework. In particular this will tackle where operators have allowed people to gamble amounts that are clearly unaffordable, with very limited or no customer interaction until a very late stage; we will act to prevent harm to those who are financially vulnerable”.
Today’s update on the Commission’s website (that you can also download below) reads as follows:
Update on Remote Customer Interaction Consultation
25 May 2021
Earlier this year, we asked stakeholders about the steps remote operators should be required to take to identify and protect customers at risk of harm. This formed part of a long-running programme of work to make online gambling fairer and safer.
Our current requirements place a duty on remote operators to monitor gambling and take action where there is a risk of harm. We had identified in our casework that, while remote operators had the ability to interact with those being harmed, they were not always doing so or acting quickly enough.
We wanted to hear feedback about tougher rules to tackle this, such as requirements to take action when online operators know a customer is in a vulnerable situation and to put in place some automated solutions. We also called for evidence on the spending, time and other thresholds at which checks or action should be taken.
The proposals only applied to gambling online – not on tracks or in gambling premises – and are part of our ongoing work to improve consumer protections in online gambling.
We received approximately 13,000 responses (1,000 responses to our full consultation and call for evidence, and 12,000 to our short survey) and have been analysing the evidence and considering what respondents said. This is an update on our progress and next steps.
We have carefully considered the responses to the proposals we consulted on and the call for evidence. Many people think there should be protections in place for the most vulnerable and that appropriate checks should be in place to identify and prevent cases of clearly unaffordable gambling. Many respondents emphasised that measures should be proportionate and targeted at those at risk of harm. At the same time, customers were also concerned about privacy and freedom of choice. We take that seriously.
We want to achieve the right balance and have listened to concerns about what could be seen as unnecessary assessment of time and money spent gambling. However, we continue to see many serious failings towards customers in our casework and need to take action now to address the most significant risks. This includes customers spending thousands of pounds in short periods of time and vulnerable customers being harmed.
We have concluded that stronger requirements are needed for operators to identify a range of indicators of harm and take appropriate action more often and at an earlier stage.
From our casework and evidence on financial spend, we have identified that there are three key risks that the Commission is prioritising for action:
Significant losses in a very short time
Cases where customers have been able to spend many thousands of pounds in short periods, including minutes, without any checks. These cases are relatively rare but have very significant impacts on the consumers affected. For example, in a recent case a customer lost four thousand pounds in six minutes following sign-up.
Significant losses over time
Where customers have significant losses over a period of time without sufficient assessment of whether they are being harmed. Significant losses over time are experienced by a relatively small proportion of customers and it is appropriate to require checks for these customers. An example of this in our casework was where a customer lost thirty-five thousand pounds over two months, without sufficient checks being carried out.
Where information is available that shows when customers are particularly financially vulnerable and likely to be harmed by their level of gambling.
Our next steps will be to:
- Publish a full response this summer setting out our detailed actions on the areas on which we previously put forward proposals for consultation, including the requirement to take action where customers are known to be in a vulnerable situation, the requirement to take action in a timely manner, and in some cases for that action to be automated. We will also proceed as planned with a consultation on thresholds for operators to take action and guidance on what those actions should be.
- Continue to work closely with DCMS to feed in advice and evidence to the Government’s Gambling Act Review – recognising that broader public policy questions about how to protect people from harm will be considered as part of the Review.
- Continue to engage with consumers, the financial sector and the gambling industry on the information about customers that should be available to gambling businesses.
- Continue our broader programme of work to support the prevention of harm, including working to ensure that existing tools for setting deposit limits are used more widely and effectively.
We will provide further updates when the next consultation launches.
In the meantime, we expect remote operators to meet the Commission’s current customer interaction requirements.
It follows from the above that immediate fears of imposition of a £100 loss per month threshold for a mandatory affordability assessment arising from the Gambling Commission’s above-mentioned Remote Customer Interaction Consultation and Call for Evidence can be put aside, for the time being at least, with a more risk-based approach being required from operators in the meantime.
Insofar as such a risk-based approach is concerned, it is worthy of note that – in addition to significant losses over a short or longer period of time – the Commission is prioritising in its update (a) ‘financial’ rather than other additional forms of vulnerability and (b) only then on circumstances where “information is available that shows when customers are particularly financially vulnerable and likely to be harmed by their level of gambling”, raising the question to what extent UK licensed remote gambling operators will need to establish whether a customer is “particularly financially vulnerable”.
The Commission’s expectations in that latter respect will hopefully become clearer as it “continues to engage with consumers, the financial sector and the gambling industry [and, no doubt, the Information Commissioner’s Office] on the information about customers that should be available to gambling businesses”. Progress on the ‘Single Customer View’ initiative was a theme in Sarah Gardner’s above-mentioned 20 May speech, following on – as it did – from Neil McArthur’s earlier speech at the Money and Mental Health Policy Institute’s virtual conference for financial service professionals in October 2020, in which he invited the finance industry to join a multi-sector partnership approach to tackling gambling harm.
UPDATE: Bearing in mind the Commission’s above reference to customers that may be “particularly financially vulnerable”, it is worth noting that in February 2021, the FCA published key findings from its Financial Lives 2020 : The impact of Coronavirus survey and October 2020 Covid-19 panel survey. Accessible on the FCA’s website here (and downloadable below), the introduction to these findings reads as follows:
Financial Lives, our flagship survey of UK consumers, provides a wealth of information about consumers’ attitudes towards managing their money, the financial products they have and their experiences of engaging with financial services firms. It is unique in the combination of its design, its breadth (over 1,300 questions covering all the retail sectors that we regulate) and its size (over 16,000 respondents in the latest wave). As a tracking survey, it provides evidence of how things are improving, worsening or staying the same, from the point of view of the consumer.
As a consumer-focused and data-led regulator, it is vital that we have the insights to understand the realities of consumers’ changing financial lives. The Financial Lives nationally representative data help us to deliver our consumer protection and competition objectives through identifying harm and improving consumer outcomes. The data also provide valuable insights for the financial services industry, the Government, policy-makers, consumer bodies and academics.
Our second Financial Lives survey ended in February 2020 before the pandemic. It therefore gives us an understanding of consumers’ financial positions before the coronavirus (Covid-19) pandemic. This tells us much about their likely ability in February 2020 to deal with financial shocks. It also means that the survey acts as a baseline against which to understand changes in people’s financial situations during and after the pandemic.
To test how the pandemic had already affected UK consumers, we ran a survey – our Covid-19 panel survey – in October 2020 with over 22,000 respondents. We will use future research and analysis – including our next Financial Lives survey – to understand the changing shape of consumers’ financial lives after the pandemic.
This executive summary is in two parts. In the first part, we look at how the market has evolved since our first Financial Lives survey in 2017 to early 2020. We look in particular at how many UK adults had low financial resilience or were otherwise not well positioned to deal with the financial impacts of the pandemic. In the second part, we focus on the impacts of Covid-19 on UK adults’ financial lives, drawing largely on our bespoke Covid-19 focused survey from October 2020.