Since 1 August 2017 customers of UK-licensed gambling operators have been able to use Resolver, a free independent tool which allows complaints about operators to be made directly to the operator, with the consumer given assistance in structuring the complaint. In this article Richard Williams of Joelson analyses the introduction of Resolver for the gambling sector in the context of the statistics around gambling consumer complaints and regulatory interest in this area.
Hands up who remembers the Carlsberg beer TV advert about its customer complaints department? The one with the dusty telephone which never rang, because Carlsberg beer was so good. And when it did ring on one occasion, the caller had the wrong number. It’s worth having a look at the advert on YouTube, because it’s very good, and if not the best beer in the world, Carlsberg is rightly credited with having some of the best marketing in the world.
For operators in the gambling world, no doubt their complaints department isn’t as quiet as the one at Carlsberg. In terms of licence conditions, LCCP 7.1.1 requires licensees to satisfy themselves that their contractual terms are not ‘unfair,’ to set those terms out in ‘plain and intelligible language’ and to make customers aware of material changes to terms in advance. Despite this, gambling disputes are still common. Whether it’s unclear sign-up or bonus offers, incorrect pricing, inability to withdraw funds or pricing disputes, gambling customers are a canny bunch and do not like to lose money. Operators large and small are therefore likely to have to deal with complaints on a regular basis.
When disputes do arise, social responsibility code provision 6.1.1 LCCP requires all UK licensed gambling operators to have a system in place to handle customer complaints. In particular licensees must:
Furthermore, licensees must ensure they have an arrangement in place to refer a dispute to an alternative dispute resolution (‘ADR’) entity, where the operator’s complaints procedure does not resolve a complaint to a customer’s satisfaction. The ability to refer a dispute to the operator’s chosen ADR entity must:
From 1 August 2017, the Gambling Commission announced that gambling consumers would be able to use ‘Resolver’ to make complaints. Resolver is a free independent tool for consumers and operates independently of the Commission. The Resolver process now covers a wide range of consumer sectors and allows complaints to be made to most UK gambling operators.
It helps individuals to make complaints in a structured way and sends those complaints directly to an operator via the Resolver portal. An ‘@resolver.co.uk’ email address is allocated to a complainant to avoid breaking data protection rules. The Gambling Commission has advised operators that it would expect them to accept customer complaints received from a Resolver email address, in the same way as a direct customer complaint. The Resolver generated complaint then feeds in to the operator’s usual complaints procedure and provides a tool to monitor progress of that complaint. Resolver does not charge either businesses or consumers for its service, but is funded via ‘data intelligence.’
Resolver claims that whilst the facility can potentially raise the number of complaints made, it also ensures that consumers do not make unwarranted complaints by explaining their rights. Resolver estimates that around 25% of consumers do not make a complaint once they understand their rights.
For research purposes, I used Resolver recently to lodge a complaint about a financial product and I found it well structured, easy to use and streamlined. Time will tell whether it becomes the portal of choice for consumer complaints, not just in the gambling industry, but in all consumer focussed businesses. It certainly appears to be a valuable tool for the aggrieved customer.
However, whilst Resolver streamlines the complaints process, it does not change the operator’s procedure. In the case of a gambling operator, if the dispute remains unresolved, the next step for a consumer is referral to ADR or to lodge a claim with the courts.
The Gambling Commission currently approves nine ADR entities for the purposes of the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015. A list of the currently approved providers is published on the Commission website. Operators pay a fee (usually annually) to the ADR entity to have the benefit of the ADR’s consumer disputes resolution facility.
Some ADR entities cover land-based gambling disputes only, whilst others cover all aspects. Certain sectors of the gambling industry usually use a specific ADR entity, so that IPCA is commonly selected by land-based casinos, BACTA by other land-based gambling establishments and the Tattersalls Committee for on-course bookmakers. In my experience, IBAS is the most common ADR entity used by remote gambling operators.
Where deadlock exists between a customer and a gambling operator, the customer has a right to refer the dispute to an ADR entity. Most ADR entities have an online form and will reject ADR referrals unless the operator’s own complaints procedure has already been exhausted. The ADR entity can refuse to deal with complaints which it considers to be frivolous or vexatious, although operators may not refuse to refer a dispute to an ADR on those grounds.
ADR entities resolve disputes based on their interpretation of the operator’s terms and conditions and not on legal issues. ADR rulings are not legally enforceable, although where the ADR entity assists in agreeing resolution of a dispute, the terms of reference may provide for it to be binding on both parties. Operators refusing to abide by an ADR ruling risk being de-registered from the ADR entity adjudication service.
In its most recently available report (the 12 months to September 2016) IBAS (one of the nine approved ADR entities) dealt with 7,610 consumer complaints. 6,486 of those complaints were from UK customers about a UK operator and 1,124 from overseas customers. 5,828 complaints were concluded and 1,782 were refused or discontinued. Of the complaints received by IBAS, 2,014 complaints (the highest number) related to bonus or promotional offer terms. Disputed settlement terms and pricing disputes were the next largest reasons for referral.
In 2016 the number of referrals to IBAS about misleading bonus or promotional terms led it to advise the Gambling Commission that “many of the disputes regarding rules and promotional terms stem from unclear or confusing advertising […] a reduction in disputes about unclear or misleading advertisements could be reduced through regulatory action against operators whose adverts breached the CAP/BCAP codes.” The Gambling Commission has clearly responded to this advice, given the recent regulatory scrutiny and reviews of operating licences for marketing/advertising breaches.
Often gambling customers criticise the referral of complaints to the operator’s chosen ADR entity, on the basis that it is funded by the operator and therefore it is argued, not likely to be impartial. However, this bias is not evidenced by complaints data and ADR entities would certainly dispute this criticism. Looking at the data for IBAS (2016), of 5,828 disputes referred to it, less than 50% (2,790) resulted in a ruling in the operator’s favour. 2,407 disputes were conceded by the operator and 631 were resolved in the consumer’s favour. This data does not suggest that ADR entities such as IBAS favour operators in resolving disputes.
However, there is a flaw in the process, in that ADR entities only resolve disputes in line with the operator’s terms and conditions and they do not determine whether those terms themselves are ‘unfair.’ So for example, where odds were mispriced or a slots game paid out incorrectly, an operator will usually rely on a ‘palpable error’ clause in its terms, to refuse to payout. There is no process through the ADR system to determine whether such terms themselves are ‘fair.’
Many ‘old school’ contract lawyers would argue that a legally enforceable contract (a bet) having been entered into at a specific price (the odds) is binding and to not payout on the basis of a ‘palpable’ error is an unfair contractual term. The only way for a customer to challenge such terms would be to take the matter to court (which often doesn’t justify the expense) or to report the operator to the Competition and Markets Authority (‘CMA’) to determine whether the contractual terms are ‘unfair’ under the Consumer Rights Act 2015.
We know that the CMA has been investigating the gambling industry since late 2016 and having heard from 800 unhappy customers, in June 2017 it launched enforcement action against a number of online operators who were suspected of breaching consumer law. The outcome of that enforcement action is awaited, but the CMA and Gambling Commission are clearly acting in tandem to bring gambling operators into line and to ensure that contractual terms are ‘fair’ and that the ‘deck is not stacked’ against consumers. The recent TGP Europe and Fesuge Limited public statement (January 2017) highlights regulatory action where operators’ contractual terms generally and specifically relating to bonus abuse, have been considered by the Commission to be unclear and unfair.
It’s certain that customer disputes within the gambling industry are not going to go away and the use of Resolver may actually lead to a spike in complaints. In light of the ongoing CMA investigation and close scrutiny of operators by the Commission, operators would be well advised to review their general and promotional terms and conditions, betting rules and complaints procedures.
This article first appeared in Online Gambling Lawyer.
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This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
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