Remote customer interaction - Consultation and Call for Evidence

Overview

Remote gambling operators already have the capability of identifying customers who may be harmed by gambling. Our evidence shows that the industry has not used this capability sufficiently to reduce harms. We are therefore consulting on stronger requirements that will help ensure remote gambling operators do more to identify consumers who may be harmed by gambling and to interact and take action sufficiently early and effectively to prevent harm.

Whilst some operators have continued to improve their processes on customer interaction, our casework and lived experience evidence shows that operators are not setting thresholds for action at appropriate levels, and that they are not taking the appropriate action or acting quickly enough when they do identify risk of potential harm.

Where we have identified failures to meet the requirements, we have taken compliance and enforcement action, and will continue to do so where we see failings. However, it is important that all operators learn the lessons of this casework, and that we raise standards to prevent the risks for consumers. It is in the interests of consumers to ensure that minimum standards are implemented consistently across the industry and does not rely on the Commission taking enforcement action against individual operators.

As part of these new requirements, we propose that online gambling operators must act on information they have about a consumer’s vulnerability, and to introduce stronger requirements, including that operators must conduct defined affordability assessments at thresholds set by the Commission.

We are also calling for evidence on what the thresholds for these affordability assessments should be, the nature of these affordability assessments and how operators are required to protect consumers following an assessment.

We recognise that there is a need to strike the right balance between allowing consumer freedom and ensuring that there are protections in place to prevent gambling that would have an adverse financial and health impact on consumers. It is necessary for an operator to understand whether a customer is gambling beyond their means to understand the risk of such harms.  

We also want to minimise the risk of unintended consequences. This consultation explores the risks we have identified and how we as the regulator, the industry and other key stakeholders, including the financial sector, could help to mitigate these risks.

For these reasons, we want an open and public dialogue on this consultation. We are particularly keen to hear directly from consumers during the consultation period on how operators should be required to identify vulnerability, and gambling which is unaffordable, and the circumstances where it is appropriate to take action on behalf of a consumer.

We want to have an open discussion with all stakeholders, but particularly consumers. As part of our engagement with consumers during the consultation, we will release further material to support discussion and enable the broadest possible range of consumers to share their views.

Our aim as a result of this consultation is to better protect vulnerable consumers and to prevent gambling related harms.

Why your views matter

We are consulting because we have compelling evidence that the current thresholds for action determined by operators are too high, and are not effective at identifying and preventing harm to consumers, including people in some of the most vulnerable circumstances.

To do this we propose changes to the existing customer interaction requirements and guidance to take account of the evolving evidence base. The evidence base includes the experiences of people who have experienced harms from gambling, research and our compliance and enforcement casework.

Our casework has shown that when implementing the customer interaction requirements and associated guidance, many operators have set thresholds for interaction too high, including financial thresholds that are set at tens of thousands of pounds. They have made their responses to risk too slow and too complicated, and failed to act on intelligence they receive about potential vulnerability. On affordability, their actions have often failed to take account of available data on affordability levels.

We have also seen some good examples of actions taken by individual businesses, and increased engagement by operators to share best practice, to identify success measures and refine processes over time. The learnings from this work are also embedded in the proposals in this consultation.

We want to have an open and public debate on striking the right balance between consumer protections and allowing consumer freedom. This consultation and call for evidence will run for 10 weeks, until 12 January 2021.

During this period, we will continue to engage with consumers, people with lived experience and expertise in gambling and public health protections, the industry and other stakeholders, including the financial sector.

At the end of this period for the consultation and call for evidence, and depending on the evidence received, we plan to conduct a short supplementary consultation on the final draft requirements and guidance, including the thresholds that we may set for affordability assessments.

We consider that this two-stage process, which will allow for an overall consultation period of more than 14 weeks, is the most appropriate means of engaging with a wide audience and gathering information and evidence to inform the final requirements and guidance in order to ensure more is done to protect consumers at risk of harm.

What has informed this consultation so far?

We have kickstarted our engagement with consumers and people with lived experience, industry, other regulators (such as the Financial Conduct Authority (FCA)) and stakeholders which has enabled us to build our understanding of the issues, and evidence of harm. We also gathered examples of improved practice, or successful practices in other sectors to address vulnerability and affordability in other contexts. However, we wish to continue this process during the consultation period and facilitate a proper open debate about the balance between protections and consumer freedom.

What is the current position?

Existing Customer interaction guidance for remote operators

Gambling operators are currently required to conduct customer interaction in a way that minimises the risk of consumers experiencing harm from gambling, to take specific actions to identify, interact with consumers and understand the impact of their actions. They must also take account of the Commission’s customer interaction guidance for remote operators which sets out our expectations on how operators meet these requirements.

Our guidance is designed to be updated over time to take account of emerging evidence and good practice, input from people with lived experience, as well as knowledge and lessons learned from our compliance and enforcement casework.

However, we want to make our requirements stronger and clearer. We are proposing the introduction of new Social Responsibility Code requirements into LCCP (Licence Conditions and Codes of Practice), the Commission’s rule book, and to replace the existing customer interaction guidance document for remote operators with a new customer interaction manual. This manual will bring together in one document the Customer Interaction LCCP requirements in relation to identifying harm, acting on harm, vulnerability and affordability, and revised implementation guidance.

The Commission’s current guidance for remote operators was published in July 2019. On 12 May this year, additional guidance was published which addressed key risks to consumers, particularly in response to COVID-19 risks.

What happens next

This consultation and Call for Evidence closes on 12 January 2021. During the consultation, we are keen to progress discussions and dialogue on the proposals and to collate any additional evidence to inform the thresholds for action.

Following the consultation, we will conduct a short supplementary consultation on the draft requirements and guidance, to include the thresholds for affordability checks. Although we are committed to an effective and transparent consultation process, it is also very important to take action at pace to address the risks we have identified. We will continue to enforce the existing requirements and to work with the industry and raise standards as the consultation progresses.

If implemented following consultation, the requirements and guidance would replace the current remote customer interaction guidance and the additional customer interaction guidance issued in May 2020.