The other side of the coin: how HSBC UK is taking a proactive approach to problem gambling spending

In UK gambling circles, much is made of operator conduct in responsible gambling, with all positive programmes highlighted and negative headlines scorned by individuals both inside and outside the industry. Relatively new entrants to this volatile atmosphere are UK banks, but that is a relationship which has changed substantially over the last 12-24 months and will change further following the UKGC’s decision to ban gambling with credit cards.

High street bank HSBC UK has been on the forefront of the shift towards interacting with banking customers about gambling-related harm. In November, it publicly committed to introducing ATM-style restrictions on online gambling transactions by 2020 and followed this up with the launch of several self-exclusion tools for gambling transactions.

Last month, HSBC UK confirmed it would ban all gambling transactions on credit cards, adopting the UKGC’s ban. Maxine Pritchard, HSBC UK’s head of financial inclusion and vulnerability, discusses this decision and what subsequent steps the lender plans to introduce with EGR Compliance.

EGR Compliance: To what extent has your work with GamCare influenced HSBC UK’s approach to addressing the issue of gambling-related spending?

Maxine Pritchard (MP): Our customer call centre currently receives an average of 1,000 calls a month relating to gambling. We wanted to find a sustainable and lasting solution to help our customers with this issue, so we consulted with GamCare to identify and design our gambling block. Our gambling block is available through our mobile banking app, via the telephone or via in branch contact as well, whichever approach suits the customer best. GamCare helped us design a solution and the key bit of learning for us from this was the importance of creating a period of reflection, a period of thinking time among our customers about their gambling. Being able to switch the block on and off at a moment’s notice was not going to help them, and in our discussions with GamCare we quickly identified that a minimum notification period of 24 hours before blocks could be removed or added was sufficient. We felt that was the right level at the time and we continue to monitor that period

We have a customer care line which directly supports vulnerable customers with 30-35 advisers in that team based in centres in Hamilton and Swansea. They take a variety of calls, including from those customers talking to us about problem gambling. We asked GamCare to help us to train these specialist advisers in observing gambling-related problems, so that now they’re able to recognise the signs of at-risk gambling, because it’s not always obvious that’s what someone is calling us about. Gambling-related harm is often present in many different ways and could be a result of other factors, so having that ability to have really thorough conversations with our customers really helps. GamCare did a full day’s training workshop with our advisers directly concerning gambling-related harm.

EGR Compliance: How are gambling transactions identified using your systems and excluded? Is it a unique identifier system?

MP: Every transaction placed on a credit or debit card is linked to what’s called a merchant code, so you might have retail as a merchant code. There is also a merchant code for gambling, that will include  gambling websites, betting shops and the lottery is also on there. This is universal across all banks and generally comes from the card issuer i.e. Visa or Mastercard. So, from our side of it, we’re able to take a look at any instances of this merchant code appearing and immediately block them from a customer’s account.

EGR Compliance: In your opinion should other banks follow suit and totally ban gambling-related transactions in line with the UKGC’s own credit card ban?

MP: While we can’t comment on the approach of other banking firms, we think it’s obviously great that a lot of banks are finding solutions for their customers in this area. We know that two-thirds of the UK population gamble, although only 8% of those do fall into the category of being problem gamblers, so we welcome the UKGC’s ban on credit cards. This ban really addresses the credit card issue, so we only really now need to focus on at-risk gambling transactions being placed through debit card spending, that 8%. Targeting those who are spending more than they can afford and those who are chasing losses.

EGR Compliance: What do the bulk of customers contacting HSBC customer service line regarding gambling-related transactions generally ask for? And how do you as a business deal with it?

MP: We have a range of calls that come into the dedicated vulnerable customer call team. Customers can be asking for anything from help in managing their gambling spend by blocking transactions, or they might be talking about attributing debt on an account to gambling. It’s a case of having a good and thorough conversation with that individual and looking deeper – they might be talking to us about something completely different. Our teams’ job is to use the training they’ve been given to identify these issues and making sure that they receive the right kind of help based on their individual circumstances. For example, we recently spoke to an army veteran who was talking to us about extending his overdraft. Following a deeper conversation with him, it transpired that in order to fill that void of leaving the military, he was replacing it with gambling and as a result had developed a gambling problem. It’s not necessarily that people will phone up and go straight in and say, “I have a problem with gambling, and I need your help”, sometimes it takes a bit of time to unravel that need from the customer. We also have relatives of at-risk individuals calling us fairly frequently as well, and so we’re able to provide support to relatives and give helpful options to them in order to help problem gamblers in their immediate family.

EGR Compliance: Your ban currently extends to credit cards only, is there any way that the ban could be extended to cover debit cards as well?

MP: It’s an interesting question. As we’ve discussed we know that it’s around about two-thirds of the population that gamble, whether that’s regularly or not, and only 3% of those gamblers would say they spend more money on gambling than they can afford and 5% chase their losses. These figures are based on the 2015 UK health survey. So, it’s really that 8% that we’re looking at supporting, so if we were to have a total outright ban on gambling we wouldn’t necessarily be addressing and helping directly those 8% that need it. We’d instead be bringing this prohibition into the population where there isn’t a need for direct support from us. At the moment, there is no plan to ban gambling transactions on the debit card from the HSBC side. It’s really about finding solutions for those 8% that need that additional support.

EGR Compliance: How have HSBC’s existing blocking mechanisms been embraced by many customers in respect of debit card spending? How many have elected to do so?

MP: We know that between implementing the block in mid-November through to the end of February there were over 30,000 blocks applied and of those there is a 70/30 split in terms of debit card being the 70% versus credit card being the 30%. The Gambling Commission has now banned gambling on credit cards in the UK, and that ban relies on the gambling industry blocking these transactions from their side. What we’ve also done over the top of that is introduce our own ban, almost like a safety net. So that means if an individual were to try to gamble using their credit card and if somehow it wasn’t linked properly, we would still be able to catch it with our secondary layer of protection. We’ve also made sure from our systems’ perspective that there is a total block on credit cards.

EGR Compliance: Where for you are the big challenges of addressing gambling-related harm within the banking sector?

MP: Problem gambling is a very complex issue, there really isn’t one solution that fits everyone so it really is about having a multi layered approach. We started with our gambling block and we’ve also got our staff well trained to recognise where they can support customers. We also have a service called the independence service, where you could nominate a trusted person to have authority over your accounts to look after your banking for you and ringfence that away from you. Under this you also have access to a basic bank account which doesn’t allow any lending on it, so you can continue living normally but the risk on that account in terms of overspending is reduced because you can’t get credit on the account – you can only spend what’s in there. We have a variety of different solutions, including one where you can reduce your daily withdrawal ATM limit. Most of our cards have a £300-£500 a day withdrawal limit, but our customers can put that down to as little as £10 a day. We know cash use is decreasing significantly, but it’s all about adding that extra catchment layer for problem gambling. The challenge is coming up with more and more solutions and making sure that we are helping people.

EGR Compliance: Do you plan to introduce any other gambling-related spending blocks or tools over the coming year?

MP: We’re always working on new ways to help vulnerable customers and continue to explore other ways in which we can support customers with gambling addictions. We know that this is a challenging time for many of our customers, with some not working and perhaps facing financial difficulty. By taking away the option to gamble on credit cards, we hope to minimise the risk of problem gamblers accumulating debt and chasing their losses. Our specialist support team are on hand to help vulnerable customers including those at risk of financial harm from gambling and can refer to trusted external organisations where needed.

We have plans underway to review what else we can do and we are working on some solutions. Covid-19 has obviously sent a lot of our plans in a different direction and our customer priorities have had to be rebalanced as a result. That is not to say that we are not addressing gambling as a priority, and we understand gambling could increase because of the lockdown, but we need to make sure we are addressing wider priorities accordingly.