There was no uniform approach to the handling of complaints by, and disputes with, customers in gambling until the provisions of the Gambling Act 2005 came into full effect in Great Britain in September 2007.
It was only then that gambling debts became legally enforceable for the first time. The UK Gambling Commission’s early versions of its Licence Conditions and Codes of Practice (LCCP) did little more than require licensed operators to have a written procedure for customer complaints and disputes and to keep a record of them.
When the first requirement for operators to refer disputes to an independent third party was subsequently introduced, it wasn’t even mandatory for it to be free of charge for the customer.
How times have changed. The consumer has increasingly been promoted to the heart of gambling regulation, most prominently during the relatively short reign of Sarah Harrison as chief executive of the Gambling Commission. Harrison’s arrival also coincided with the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 coming into force.
This combination of events led to the Commission’s “Complaints processes in the gambling industry” review in March 2017. This was conducted against a backdrop of heavily publicised concerns on the part of the Commission about what it perceived to be an increasing lack of public trust in gambling operators, something that has sadly grown apace since then.
It included a finding that “the complaints system in the gambling industry is not working for consumers, who have found it difficult to access, time-consuming to use, and [who] question whether it is independent and transparent”.
In her foreword to that document, Sarah Harrison said: “We want to see an industry that aspires to excellence in complaints handling.
An industry that values and seeks out feedback from customers, that swiftly and effectively resolves customer complaints, and that uses the learning from those customers to raise its standards and deliver ever higher levels of customer service”.
So it is that, with effect from 31 October 2018, a new complaints and disputes regime comes into force in each of the following respects.
1)LCCP change
An amended social responsibility code provision 6.1.1 within the LCCP comes into force on that date, intended to ensure that B2C gambling operators provide better complaints processes, including arrangements for their customers to be able to refer any dispute to an alternative dispute resolution (ADR) provider, if the operator has been unable to resolve it within eight weeks from receiving it.
2) Gambling Commission guidance
UK licensed operators will be mistaken if they think that the above change needs little preparation. The Gambling Commission has produced seven pages of guidance on implementation of the amended LCCP provision (available on its website) that it expects licence holders to take account of when developing their complaints handling policies.
The guidance document is essential reading material. It sets out the minimum standards that the Commission expects from operators when they handle customer complaints and summarises the Commission’s reporting requirements relating to complaints that operators receive.
Addressing past confusion about whether an ADR provider has jurisdiction to adjudicate certain matters referred to it, the guidance also provides much-needed clarity on what the phrases ‘complaint’ and ‘dispute’ mean, namely:
• ‘complaint’ means an expression of dissatisfaction, whether spoken or written, about any aspect of the way the licence holder conducts its licensed activities (including the outcome of a gambling transaction, the way in which the transaction was managed and concerns about the way in which the licence holder conducts its business in relation to the three licensing objectives) and
• dispute’ means complaints about the customer’s gambling transaction (including management of it) that have not been resolved at the first stage of the complaints procedure, including those linked to the application of bonus offers or to other terms and conditions, account management, or the customer’s ability to access his or her funds and winnings.
The guidance also includes very helpful flowcharts illustrating the applicable complaints process timescales and complaints and disputes regulatory return requirements.
3)Standards and guidance for ADR providers
The Gambling Commission has published new standards and guidance for ADR that are intended to improve how complaints are handled by ADR providers in the gambling industry. This follows the Commission’s finding in March 2017 that consumers did not always get good customer service from ADR providers and that decisionmaking standards varied.
It would be a mistake for operators to think this guidance is applicable solely to ADR providers. The new standards and guidance make clear the Commission’s expectations on:
• the types of consumer complaints it expects ADR providers to take on (including disputes linked to unfair terms or practices),
• principles for considering compensation,
• decision quality standards, particularly focused on how providers look at and use evidence,
• the Ombudsman Association’s six principles of good governance that it expects ADR providers to follow,
• conflicts of interests,
• the information and customer service ADR providers give to consumers (including a reminder that all gambling businesses that sell goods or services to consumers online must provide on their websites a link to the ODR platform) and
• the information and data ADR providers share with the Commission and others, each of which are very relevant considerations for operators.
The aforementioned definitions of ‘complaint’ and ‘dispute’ make it clear that complaints that are not related to the gambling activities and do not pose a risk to the licensing objectives do not fall within the scope of ADR provision within the Commission’s regulatory ambit.
There may of course be borderline cases, for example a complaint about poor customer service or staff manning a telephone or online chat. While that might not appear at first sight to be gambling-related, it might well be if the poor service makes it difficult or impossible for the consumer to promptly raise concerns or make a complaint.
The Commission suggests that “where the type of complaint is unclear, it is generally better to at least initially treat it as a gambling-related complaint”.
The British have a reputation for complaining. Licensed gambling operators need to ensure those complaints are all handled properly in accordance with the new requirements.
David Clifton is a founding director of Clifton Davies Consultancy Limited and a consultant to Joelson Wilson Solicitors. David has specialised in gambling law since the early 1980s and was among the first UK lawyers to advise the online gambling pioneers in the mid-1990s.