The credit card ban on gambling in the UK not planned very well

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An attempt by U.K. authorities to protect the country’s citizens from themselves includes a recently-implemented ban on the use of credit cards for gambling purchases. They even went so far as to restrict the use of replenishing eWallets that didn’t include mechanisms to prevent account holdings from being used for gambling purchases. The measure had already been mocked for its lack of focus and common sense, but a new issue may be emerging that shows how futile the efforts really are. Gamblers will find a way to fuel their habits regardless of the level of difficulty, and many might now be turning to the house for financing. Not the house as in the gambling venue – the house as in the one they can use to take out mortgages on for considerable amounts of cash.

the-credit-card-ban-on-gambling-in-the-uk-not-planned-very-wellMortgage lenders in the U.K. have sent out a call to the U.K. Gambling Commission (UKGC), expressing their concerns over the possible rise in mortgage requests from individuals looking for money to compensate for the loss in credit card-based gambling purchases. These gamblers could remortgage their homes to cover the costs of their activity, while hiding the fact that they might have compulsive gambling habits. The UKGC’s suggestion is that the mortgage companies perform more thorough background checks when applications are received to try to determine if a gambling problem exists.

The U.K. estimates that there are around 400,000 citizens, out of a population of around 66.5 million, who could be classified as suffering from a gambling problem. That amounts to only slightly more than half a percent of the population and is 50% of the number of people who used a credit card for gambling purchases in 2018, according to U.K. Finance.

Adam Bradford, the co-founder of the Safer Online Gambling support group, believes mortgage lenders should be psychologists. He is under the impression that these businesses should understand their clients’ psychology to be able to ascertain whether or not a gambling problem exists, and take appropriate steps if anything out of the ordinary is found. However, who is responsible for defining “out of the ordinary” isn’t clear.

One possible source of assistance that could have been offered was the creation of the GAMSTOP self-exclusion effort in the U.K. However, since the credit card ban was first announced, the number of enrollments has dropped, as has the number of members previously enrolled. Those members who had already signed up for the program are now dropping their membership, according to problem gambling charitable group GamCare.

When filling out a mortgage application, it wouldn’t be overly difficult to hide the true reason for the request for funds. Mortgage companies can only go so far in trying to determine the reason but, at the end of the day, if a person is eligible and has the means to cover the payments, at least on paper, the mortgage companies are in business to make money – there wouldn’t be much incentive to reject the application, especially when the percentage of problem gamblers is reportedly so low.

The UKGC is trying to implement extreme measures to save people from themselves, but these efforts, even if for a noble cause, are out of place and misguided. If authorities expected a ban on credit cards to help, what they might find, instead, is 400,000 mortgages that can’t be covered by the borrowers.