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GamCare workshop makes recommendations on unaffordable lending

London 20 September 2022: At present, there remains little to prevent consumers borrowing with overdrafts, loans, cash withdrawals – or riskier lines of credit such as payday loans and transfers from credit cards for gambling.

To help creditors understand the impact of this issue and highlight what lenders can do to detect harmful gambling when underwriting credit products, GamCare facilitated an Insight Workshop, including the lending sector, debt support, gambling support services, academics, policy makers, regulators and trade and standards bodies. 

Several themes emerged, representing important calls for action:  

  1. The need for firms to implement programmes of cultural change:
    • Fostering improved staff awareness and training to better understand how gambling harms can impact their customers.
    • Staff should be trained to signpost customers to free tools and services to protect people experiencing gambling-related harms – e.g., TalkBanStop
  1. Improving affordability assessments by applying a ‘gambling harm lens’ when underwriting credit products:
    • There is scope for the sector to work more closely with charities and people with lived experience to better understand harmful gambling.
    • Through that collaborative work we could help to define a meaningful set of indicators, and interventions.  
  1. Reducing friction as much friction as possible, to support gamblers who are trying to stop, for example through:
    • Preventing at-risk customers from having automated credit increases, including when applying for an overdraft extension or credit card limit.
    • Giving vulnerable consumers breathing space and an option to change their mind by introducing time delays between credit application and approval to money going into the account.
    • Blocking gambling transactions via credit card, in line with the Gambling Commission’s ban on credit card use for gambling, (which doesn’t affect financial services). Some credit card providers have already implemented this, but this should be standardised across the industry.   
    • Taking credit applications out of automated credit assessments where data shows that a customer may be gambling harmfully (or they previously disclosed they’re struggling to control their gambling).  

With our helpline advisors increasingly hearing from callers to the National Gambling helpline about how the rising cost-of-living is affecting their lives (with at least two-thirds of callers and those accessing GamCare’s treatment services mentioning some level of gambling debt) all these measures represent small steps that could make a huge difference.  

You can read the full summary from the Workshop here, with all of the key insights and recommendations for the lending sector. Please also read a blog by Raminta Diliso, GamCare’s Financial Harm Manager, here.  

Colin Walsh, GamCare’s Lived Experience Manager, said:

“I know from my personal experiences, and I now see first-hand through our lived experience community, how quickly gambling can escalate when it becomes problematic.  The ease of access to multiple lines and forms of credit in our 24/7 world allowed me and many others to gamble with borrowed money in a way which isn’t controlled, responsible or sustainable but also the guilt, remorse and shame felt after gambling episodes.  By raising awareness of the signs of harmful gambling with lenders I hope we are able to improve protection for people being harmed by gambling and give some time for reality checks and reflection and rather than regret and misery.”

Commenting on the link gambling debt and loan approvals, John Wightman, Ombudsman Leader and Head of Practice, Consumer Credit said:

“Where the Financial Ombudsman Service looks at cases involving harmful gambling there is often a vulnerable customer at the heart of the complaint. We would ask whether the firm treated its customer fairly, for example by putting in place appropriate support where it was aware (or should have been aware) that a consumer is vulnerable. We also see complaints where customers have borrowed beyond their means to fund their problem-gambling habit, which often leads to over-indebtedness, arrears and difficulties meeting basic living expenses.

“Firms should lend responsibly and make sure their actions aren’t putting customers in a worse position. We would expect a lender to be able to justify any decision to provide credit to a customer where it knew (or should have known) about a track record of problem gambling. If a customer believes they have been treated unfairly by a lender, they should come to the Financial Ombudsman Service for free and we will see if we can help.”