Report: UK affordability checks should be based on individual circumstances

If affordability limits are to be introduced in the UK, they should be based on the circumstances of the individual, according to a new report by the Centre For Social Justice (CSJ).

In a report entitled Not a Game, the CSJ, which looks to stop injustice in the UK, recommended limiting all deposits to gambling accounts based on individualised banking data.

The independent think-tank said these mechanisms should be developed by a yet-to-be established third-party gambling ombudsman and a panel of experts.

“First, deposit limits would provide banks that carry out affordability checks with more data points, leading to increased accuracy,” the report states.

“Secondly, and more importantly, deposit limits would create increased friction for gamblers to deposit large sums of money into their gambling accounts,” the report adds.

The CSJ suggests that any potential model would follow a similar vein to that used by credit reference agencies in determining an individual’s accessibility to financial products including mortgages and credit cards.

“While this model relies on banks to provide key financial data, operators must also play an important role in determining harmful play.

“Operators have the ability to analyse gameplay for trends in harmful behaviour and must alert the ombudsman of their findings. Ultimately, for deposit limits to be effective, the ombudsman must work closely with both banks and operators to ensure consumer protection,” the report adds.

In respect of the third-party ombudsman, the CSJ has said the body should be given statutory authority to carry out the affordability checks, with powers to act in protection of consumers.

This includes the establishment of a duty of care for the banking sector to share “limited and necessary data” with the ombudsman, with the body tasked to operate with full transparency, notifying individuals of any decisions or actions taken.

In addition, the CSJ has said all gambling transactions should be verified via debit card details for ID verification and data collection purposes, including chip and pin transactions, but only in GBP (£) for regulatory purposes.

All gambling transactions, including those taking place via loot boxes, should have their own merchant category codes to differentiate them from regular transactions and for reporting purposes, the CSJ has recommended.

Finally, the CSJ called on the government to create an “index of harm” to identify harmful gambling behaviour which can be utilised by regulators, researchers and the financial sector.

“We expect this index of harm to be developed through consultation with a wide variety of experts to ensure that it holistically addresses the spectrum of gambling harm, unlike models that are currently in use,” the report adds.

In a foreword accompanying the report, Conservative MP Sir Iain Duncan Smith said: “We must use technology and data informed models to identify those most in need of help and reach out to them.

“We call for a model that uses a strong independent ombudsman to analyse essential banking data to identify those in need of support and protection from gambling-related harm.

“With the ombudsman’s intervention, we can protect the fundamental rights of individuals to express personal and financial agency while achieving necessary levels of protection to people and their families heading for financial exclusion and serious harm as a result of their gambling.

“This is, I believe, a very conservative action to take and one which would help those in the poorest communities enormously,” Duncan Smith concluded.