An interview with Professor Sharon Collard about the role of credit unions in identifying and supporting members at risk of gambling-related vulnerability.
On July 14, GambleAware hosted a webinar on the topic of finance and gambling. During the session, which was chaired by Money and Mental Health CEO, Helen Undy, speakers explored what data and information is available to banks to help protect against and detect possible gambling harms.
Simon McNair from the Behavioural Insights Team also shared highlights from two reports produced using HSBC and Monzo data that examined what customer transactional data can show us about gambling habits.
Professor Sharon Collard from PFRC talked through the new guide for financial institutions, including the main recommendations banks should take forward.
Natalie Ledward from Monzo, also shared her view on the new research and guide, including how it will impact their work going forward to help prevent their customers from experiencing gambling harm.
You can watch the webinar below.
This week the Personal Finance Research Centre and GambleAware published a practical guide for financial services firms seeking to protect customers from gambling-related financial harms.
The guide explores how the UK Financial Conduct Authority’s expectations regarding the fair treatment of vulnerable customers can be applied to harmful gambling. It offers practical examples of how regulated firms are already identifying and supporting customers who are at risk of gambling harm and what more can be done.
You can read the guide or our executive summary here, and watch our short summary video below.
By Sharon Collard
The boom in online investing brings opportunities but also risks – including links between risky investing and gambling problems. The blurring of investing and gambling poses challenges for regulators and businesses that are responsible for protecting consumers from harm.
From a UK perspective, the rise in online investing – boosted by the pandemic – marks an important shift in a population that has stuck doggedly to cash savings even in the face of historically low interest rates. And it is encouraging to see younger adults getting involved in tech-enabled investing, attracted by easy-to-use interfaces and fee-free business models.
At the same time, new trends like meme investing exploit age-old human biases that can exacerbate risk, particularly in the volatile and uncertain times in which we live. People see high-risk activities like cryptocurrency trading (unregulated in the UK) as an exciting fast-track to easy wealth. Investors may conduct little or no research before they buy, instead making snap decisions based on what they hear from social media influencers and short-form trading tips on TikTok. They tend to over-state their own knowledge while also distrusting official sources of information and dismissing regulator’s risk warnings as old-fashioned and downright boring. And it goes without saying that their ‘capital is at risk’ with a good chance of losing most or all the money they invest and a low chance of making money even over the longer-term.
In addition, the academic literature highlights strong links between risky investing and gambling problems. Risky trading can be part of a broader repertoire of gambling activities and studies show links between higher rates of “problem gambling” and high-frequency trading in riskier products like derivatives. There is evidence of “addictive-like trading behaviour” – small early wins followed by loss chasing, where someone can end up losing control over the money they have invested. These risks have been exacerbated during the pandemic with people spending much more time at home where they may be isolated and bored. The national charity GamCare has reported a rise in the number of people asking for help with problems related to day trading on its online forums. The past few days have also seen the fallout from the collapse of Football Index, a gambling platform with an estimated 0.5 million users that marketed itself as a “stockmarket for footballers” – perhaps the most blatant example to date of the blurred line between gambling and investing.
This blurring raises many questions for regulators and businesses about how to protect individuals who may be at risk of significant harm through gambling and high-risk investing. There is also the difficult question of how to regulate an online space awash with unregulated financial advice and increasingly sophisticated investment frauds and scams. For gambling treatment and support professionals, it raises the question of whether high-risk investing should routinely be screened for, and treated as, a subset of gambling disorder. Altogether, this points to the need for better cross-sectoral regulation and collaboration in a world where boundaries are more blurred than ever.
By Katie Cross
It’s Talk Money Week, a fantastic initiative to encourage people to open up about their financial worries. There are many reasons why people don’t like to talk about money but one reason revolves around shame and the concern people have about being judged. This is very relevant when it comes to gambling disorder, sometimes called the ‘hidden’ or ‘invisible’ addiction.
People with gambling disorder don’t present with physical symptoms in the same way as drug or alcohol addiction which can make them difficult to detect. The perceived stigma associated with gambling disorder can lead people to feel ashamed, which may result in them hiding their gambling in order to avoid being judged, and refrain from seeking help or treatment.
It is reported that only 2 in 10 people experiencing harms arising from gambling (17%) sought treatment over the last year, rising to 54% for ‘problem gamblers’. This means that 83% of those experiencing some level of harm from gambling, and around half of ‘problem gamblers’, aren’t seeking support, of which 11% and 27% respectively reported ‘stigma and shame’ as a reason for not doing so. Moreover, this stigma and shame can actually lead to an increase in gambling activity, as gamblers might try to win back the money before a loved one finds out, or gamble more as a way of escaping painful emotions. Therefore, addressing stigma is vital if we want to reduce harm and encourage more people to seek help.
Talking to a loved one about gambling disorder can provide the encouragement needed, with 1 in 5 ‘problem gamblers’ saying this would motivate them to seek support. Although potentially a difficult conversation to initiate, it could make a big difference. The Money and Pensions Service guides offer advice on how to start a conversation about money with a loved one. Not everyone has someone to talk to though, and there are also some great podcasts out there from people with lived experience of gambling harms that aim to offer support to those affected and further our understanding of this complex issue.
In addition, we believe there is a strong rationale for the financial services industry to play a greater role in reducing gambling harms. One obvious way to do this is responsible lending. In addition, having access to transaction data puts financial services firms in a unique position to spot early warning signs of gambling disorder. They have the opportunity to reach out to customers, for example by offering budgeting tools, ATM withdrawal limits, spending limits or bank card gambling blocks, all of which might go some way to reducing gambling harms.
Information and help for people with gambling disorder:
Information and help for people affected by someone else’s gambling:
By Sharon Collard
Talk Money Week aims to increase people’s sense of financial wellbeing by encouraging them to open up about their personal finances. For people with gambling disorder, feelings of stigma and shame can make this challenging. Added to this, harms that arise from gambling are often hidden and only become visible following major crises such as extreme debt or relationship breakdown. These events also have a devastating impact on family members. This blog looks at how financial firms can help people affected by someone else’s gambling.
For every person with a gambling disorder, between six and ten other people are affected. An estimated 7% of Britain’s adult population (around 3.6m people) have personally experienced negative effects from someone else’s gambling – usually someone in their immediate family – with harms arising from gambling impacting their relationships, mental wellbeing and finances.
The gambling literature highlights ways in which affected others can help and support those with gambling disorder. In Singapore, family members can act on behalf of someone with a gambling disorder and arrange for them to be excluded from gambling venues. In New Zealand, gambling outlets receive guidance encouraging them to do all they can to take notifications from third parties (such as family members or friends) into account, as these are one of the most common indicators of gambling harms.
For UK financial services firms – the focus of our MAGPIE programme – this raises questions about whether they might accept requests from affected others to help reduce the financial harm caused by someone else’s gambling, such as activating a bank card gambling block, setting ATM limits or restricting access to credit. New guidance from the Money Advice Liaison Group and the Money Advice Trust sets out the practical actions that firms can take to manage disclosures of vulnerability such as gambling disorder, including disclosures from carers and other third parties, while also taking GDPR into account (Figure 1).
Figure 1: The CARERS protocol to help frontline staff manage disclosures from carers and third parties (From Vulnerability, GDPR, and disclosure: A practical guide for creditors and advisers)
Equally, affected others may benefit from help and support themselves to protect their money and wellbeing. A Citizens Advice survey found that 69% of affected others had to cover the costs or debts of the gambler – and in some cases felt coerced into this.
In the first year of the MAGPIE programme, we talked to many people with lived experience of gambling harm. One common theme was their desire for financial services firms and other professionals to develop a better understanding of gambling disorder and gambling harm. In the words of one participant: “Banks and financial institutions need to be educated about the illness [of disordered gambling]”. This is one of the areas we will focus on in our second MAGPIE project – a practical guide to help financial services firms better understand and support people affected by gambling.
Information and help for people affected by someone else’s gambling:
Information and help for people with gambling disorder:
By David Collings, Sharon Collard and Jamie Evans
Back in July we published a review of bank card gambling blockers – a feature that allows a debit or credit card customer to block their account or card from being used for gambling transactions. Working with GambleAware, we evaluated the potential for these blockers to help those who want to control their gambling.
Our review brought together bank data on customer use of blockers; discussions with treatment providers, firms and regulatory bodies; and, crucially, insights from over 100 interviews and surveys with people who have lived experience of gambling. It showed that blocker technology works and can help people control their gambling spend, but card blockers need to be more widely available than is currently the case. And, where offered, their design should incorporate elements of ‘positive friction’ in the form of ‘cooling-off’ periods.
At the time our report was written, eight firms advertised and offered blockers to their customers either on credit cards, debit cards or both. These include five of the nine largest banks and building societies in the UK – Barclays, HSBC, Lloyds, Royal Bank of Scotland Group and Santander – together with three other banks – Cashplus, Monzo and Starling.
We estimated that gambling blocks on debit cards are available for roughly 60% of personal current accounts (around 49 million accounts) and at least 40% of credit card customers (roughly 26 million cards). But if Santander and the Royal Bank of Scotland Group were to offer gambling blockers to all their debit card customers, we estimate that blockers would be available for around 90% of current accounts (equivalent to 70 million accounts – 22 million more than at present).
Increasing availability of these blocks isn’t enough on its own. Our findings show that blockers need to include ‘positive friction’ in the form of ‘cooling-off’ periods – to encourage time and reflection before someone can gamble again – in order to be effective.
As the table above shows, five of the eight firms offering blockers included a cooling-off period – a period after a customer disables the block before they can gamble again – while the remaining three blockers could immediately be toggled on and off, meaning they functioned more like a light switch than a lock.
But this is a fast-changing landscape. In September Barclays announced it is introducing a 72 hour cooling-off period to its gambling blocker, responding to customer feedback about the positive impact of such a delay, making it the first bank to introduce a cooling-off period off this length. This customer feedback echoes findings from our research, where nearly 60% of respondents with lived experience of gambling felt that a cooling-off period should be longer than 48 hours.
In fact, the message from those affected by gambling was clear: the more positive friction that can be built into a bank blocker, the better. Our research also explored other examples of positive friction that could be beneficial, including making gambling blocks the default on new bank cards, or automatic alerts for third parties such as a friend or family member related to gambling spend.
Our interviews with banks highlighted three main motivations for developing and implementing gambling blocks: ‘soft’ pressure from regulators; evidence of customer harm from gambling; and market ‘peer pressure’ as other banks launched gambling blocks for their card customers.
We therefore reiterate our call on the Financial Conduct Authority as part of its forthcoming guidance on the fair treatment of vulnerable customers to recommend that gambling blocks are standard on all credit and debit cards and require customers to wait at least 48 hours between turning off the blocker and being able use that card to gamble.
Finally, introducing gambling blockers shouldn’t be seen as ‘job done’ for banks and building societies – there is much more work to do and the purpose of our three-year MAGPIE research programme is to help progress that agenda. Similarly, other organisations beyond banks still need to be taking robust action to reduce gambling harms.
This blog was originally posted on the Money and Mental Health Policy Institute blog. Read the original post here.
By Sharon Collard, Jamie Evans and Chris Fitch
Our review of bank card gambling blockers published today shows they can be an effective way to help people control their spending on gambling. To make sure more people can benefit from this technology, all banks and credit card firms should offer blockers as a standard feature on their cards, with a time-released lock of at least 48 hours and the option to limit cash withdrawals.
A lot has happened since September 2019 when we officially launched the ‘Money and Gambling: Practice, Insight, Evidence (MAGPIE)’ programme funded by GambleAware. With the COVID-19 crisis ongoing, there are concerns that regular online gamblers have gambled more during lockdown; while both the House of Commons and the House of Lords have called for urgent reform of gambling regulation so that children, young people and adults are properly protected from gambling harm.
Our review of bank card gambling blockers shows they can help people control their gambling spend but they need to be much more widely available. While eight UK financial firms offer gambling blocks as standard to customers with a credit or debit card (see Table 1 below), as many as 28 million personal current accounts and 35 million credit cards may not have this option. We believe that blockers should be a standard feature available to all card holders across a firm’s full card range.
There is also work to be done to make sure people know about bank card gambling blocks. Nearly half of our survey participants (43%) – many of whom were receiving treatment and support for their gambling – were not aware that bank gambling blocks exist.
The design of bank card blockers is critical to their effectiveness. Some can be toggled on and off by customers at will – making them a light switch rather than a lock. Our review shows that a time-released lock of at least 48 hours should be a standard feature on all blockers – something the House of Lords also supports. To complement gambling blockers on cards, we want to see customers given the option to limit their ATM withdrawals. A ‘third line of defence’ could be the option to block cash transfers from a credit card to an account where the money could be used to gamble.
Despite the Gambling Commission’s recent ban on licensed gambling companies accepting credit card payments, we believe that every credit card should still offer gambling blocks. This is because online gambling sites outside of Britain are not licensed by the Gambling Commission and continue to allow customers in England, Wales and Scotland to gamble via credit card payments. Credit card providers could go one step further by automatically restricting gambling on all credit cards, rather than relying on customers to turn on a block. Even then, there remains a risk that unscrupulous gambling operators engage in ‘transaction laundering’ which renders a gambling block ineffective.
Gambling blocks can help but they are not enough. People with experience of gambling harms want to see financial firms take wider action if they are serious about helping tackle this public health issue. Beyond banks, they want the gambling industry, regulators and the Government to do much more to protect consumers in a world of boundless and frictionless gambling where, in the words of one participant, it is possible to go from “zero to devastation in a very short period”.
Read the report: