The Gambling Commission has published insights following the introduction of financial vulnerability checks.
The analysis comes from Sarah Webster, Senior Policy Officer; and Richard Sutcliffe, Senior Policy Evaluation Manager.
The financial vulnerability checks have been a controversial topic in the gambling industry since they were first proposed, with groups such as the BGC openly calling for them not to be implemented.
The policy was made a requirement for remote gambling businesses in August 2024.
At the time of the report, the financial reports were triggered after a £500 ($667.16) net deposit threshold, but following a review, this threshold has been lowered to £150 net deposits over 30 days.
On the findings, the Gambling Commission said: “We want to be open with stakeholders and provide updates on the findings, but we emphasise that these are initial findings developed largely from a single data source.
“Future findings may be different as we continue to gather data and evidence can be triangulated.”
The findings
The Gambling Commission found that 68% of operators had been voluntarily doing financial vulnerability checks for a number of years prior to this policy, and a further 26% introduced them in anticipation of the changes.
Out of these businesses, 7% of active customer accounts triggered financial vulnerability checks.
Results were delivered quickly, with 78% arriving within 10 minutes and 10% within two hours.
A total of 63% of operators started the checks after the threshold was met, but 36% did the checks earlier, such as immediately following registration or the first deposit.
Operator thoughts
“Most respondents agreed that financial vulnerability checks provided useful additional information,” the Commission said. “This helped them tailor interactions and monitor customers over time, often prompting earlier engagement with those who are indicated to be at risk.”
Operators also noted that the checks created a bank of information that could be used to analyse potential vulnerabilities, such as the scale, age and relevance of an individual’s debt.
The financial checks also use information outside of gambling, so operators can get a clearer picture of a customer’s behaviour and vulnerability. Similarly, the checks produced information that would not ordinarily be disclosed by customers themselves.
“Typically, checks were well integrated into existing processes,” the Commission noted. “Operators reported positive effects, including more proactive customer engagement, earlier intervention and better quality customer interactions.”
Lessons from the financial checks
A number of customers did report negative experiences with this, but this was usually when risk flags such as bankruptcy were identified. Operators also expressed some concern about customer displacement.
Some of the operators also did not understand how to run a vulnerability check, which is limited to checking for: a bankruptcy order or equivalent, a County Court Judgment (CCJ), an Individual Voluntary Arrangement (IVA), a High Court Judgment (HCJ), an Administrative Order or decree (AO) and a Debt Relief Order or equivalent.
As such, some operators under the incorrect impression that they were receiving credit reference data.
The Commission will continue to educate operators and guide them through the correct process.
What happens when a risk flag is raised?
The Commission noted that automated responses, such as automatic bans, should not be the assumed response to risk flags.
For example, County Court Judgments (CCJs) are a significant risk, but these can be issued for both large debts and smaller debts or disputed bills.
The Commission explained that: “Operators are reminded that they are not required to offer automated solutions that introduce significant friction - such as putting a stop on a customer account – particularly in cases which relate solely to a single CCJ which may indicate lower levels of risk.
“Where automated solutions are preferred, alternatives might be to take into account spend levels, to consider automated deposit limits at a level to reduce the risk of significant harm, which could be the ultimate action taken or a temporary measure while manual checks on the level of risk associated with the CCJ are undertaken.
“Where you are taking action in response to an overall picture of risk, rather than the FVC alone, it would be important to avoid solely attributing your action of the FVC to the customer.”
A full report on financial checks will be published once the data on the lower £150 threshold is collected
