Operators cannot hide behind AML rules for payouts

Operators cannot hide behind AML rules for payouts

Friday, June 23, 2017 Posted by Andy McCarron
Sarah Harrison has warned the industry about consumer fairness again

Gambling Commission CEO Sarah Harrison has warned the gambling industry that it cannot hide behind anti-money laundering rules to delay paying out to its customers.

The warning comes as this morning the Competition and Markets Authority (CMA) has revealed that it is launching enforcement action against a number of online gambling operators suspected of breaking consumer law with their labyrinthine bonus terms and conditions.

In addition to this enforcement action, the CMA is also opening a new line of investigation into unfair terms and practices that could restrict customers’ rights to withdraw money in their online gaming and betting accounts.

Gambling operators are required to check their customers’ identities to fulfil both their social responsibility and anti-money laundering (AML) requirements. However, concerns have been raised that some operators may be applying these requirements in a restrictive way, preventing consumers from legitimately withdrawing funds from their gambling accounts.

Harrison has told the industry: “Identity checks are an important duty on the industry to prevent money laundering and to ensure responsible gambling. Where operators haven’t met those obligations, we have taken clear action.

“However, those checks cannot be used as an excuse to unduly restrict legitimate customers from withdrawing their funds. If the CMA finds specific consumer protection failings in this area, it will add further cause for the Commission to review how fairly operators are treating consumers.”

The CMA’s extended investigation is looking at the terms about stake recycling before withdrawal, compulsory inclusion in site publicity, unreasonably high minimum withdrawal limits, daily, weekly or monthly withdrawal limits that appear unreasonably low and terms that place arbitrary deadlines on the time given to players to provide information to verify their identity as a condition of withdrawal.

The CMA says it has also identified concerns with some firms where players do not make a withdrawal or place a bet over a number of weeks or months. In particular, some firms have terms which apply ‘dormancy’ charges to players’ accounts after a period of inactivity, or terms which remove all funds from inactive accounts, regardless of the size of the balance.

The development of the investigation was announced at the same time it was revealed that the CMA is charging some online operators over its bonus terms and conditions. The regulator is acting because it believes people aren’t getting the deal they expect from sign-up promotions and operators are unfairly holding on to people’s money.

This follows a joint programme of work between the Gambling Commission and the CMA to tackle a shared concern about whether people are being treated fairly by online gambling operators.

CMA senior director for consumer enforcement Nisha Arora explained: “We know online gambling is always going to be risky, but firms must also play fair. People should get the deal they’re expecting if they sign up to a promotion, and be able to walk away with their money when they want to.

“Sadly, we have heard this isn’t always the case. New customers are being enticed by tempting promotions only to find the dice are loaded against them. And players can find a whole host of hurdles in their way when they want to withdraw their money.

“That’s why we are today launching enforcement action where we think the law has been broken. We are also asking people who have had difficulties withdrawing their money when they’ve gambled online to tell us about it, and help probe this issue even further.”

Totally Gaming says: Bonus conditions have long been a contentious issue for the gambling industry’s customers as operators have looked to protect themselves against bonus abuse. However, as the CMA clearly believes, the needle has tipped too far in the industry’s favour which could prompt a major rethink into how operators attract new customers. 

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