Excessive Gambling: Banks’ Obligations for Detecting and Acting Upon Unusual Account Activity
With many years of experience, Ellis Jones has developed reputable success in two particularly niche areas of law; Banking and Finance Litigation, and Betting and Gaming Disputes.
We recently obtained an excellent result for a client, recovering the entirety of his losses from NatWest after a period of excessive gambling. Our client placed several transactions with betting operators for values of £500 to £10,000, each within a three-month period using his NatWest current account. In comparison to his usual pattern of spending, the activity on his account during this three-month window was out of the norm and resulted in his total losses of £32,669.80. Abnormal account activity included regular or large sums of money being transferred from our client’s savings account to fund his gambling. As a result, our client made a complaint to NatWest on the basis that the unusual account activity should have been detected by the bank, and that subsequently, he should have been contacted.
NatWest dismissed our client’s complaint on the basis that it was not aware of our client’s personal circumstances and mental health struggles at the time, that gambling is not a prohibited activity and that there was no evidence to suggest that making contact with our client would have changed his spending behaviour.
As a result, we advised the client to apply to the Financial Ombudsman Service (FOS), who offer a free complaint settlement process between consumers and businesses that offer financial services. A substantive complaint was prepared and sent on behalf of the client.
Initially, an FOS investigator agreed that it would have been fair for NatWest to contact our client in respect of his unusual account activity, but that the impact this may have had on our client’s gambling behaviour was inconclusive. As a result, further submissions were made requesting an ombudsman’s decision, the final level of the complaint procedure under the FOS.
The ombudsman’s investigation found that there were “no signs of regular or by any means significant gambling” in the three years prior to our client’s significant losses and that there was a pivotal change in his spending. As such, the ombudsman upheld that NatWest should have been in touch with our client to assess any potential vulnerability as the –
“FCA requires businesses such as NatWest to be alert to changes in behaviour and the potential for customer vulnerability”
In addition, the ombudsman found that our client’s decision-making abilities were impacted by his mental health conditions and career instability at the time; “the activity on the account was enough to alert NatWest that something had shifted” in our client’s personal circumstances “and it failed to take adequate steps to assist”. The ombudsman concluded that intervention by NatWest may have prompted a shift in our client’s behaviour, ultimately reducing his total gambling losses.
As a result, our client was compensated for his total gambling losses within the three-month period with an additional 8% interest applied up to the date of settlement.
The success of this matter is significant in highlighting that banks also have a duty to intervene in unusual account activity and to uphold their responsibilities to vulnerable consumers, with gambling operators also having their own social responsibility obligations to minimise the risk of gambling-related harm.
Please keep in mind that if you have already made a complaint to your bank and received a final response, there is a strict six-month deadline for making a complaint to the FOS.
For access to the full FOS Decision article.
How can Ellis Jones help you?
Ellis Jones Solicitors’ Betting, Gambling & Gaming team are specialists in acting for clients with gambling and betting claims. With years of experience and expertise in the field, our legal team can act quickly and offer a reliable service to those who may be struggling with financial loss as a result of a gambling addiction and mental health issues.
If you feel as though you could benefit from seeking advice in relation to substantial losses incurred through betting activity, please do not hesitate to get in touch with us by emailing betting@ellisjones.co.uk or via our online website enquiry form.
About the authors
Tim is a Senior Associate Solicitor in the Banking & Finance Litigation department and is based in our London office. Tim has experience in dealing with gambling claims relating to breaches of Gambling Commission’s License Conditions and Codes of Practice in relation to social responsibility.
Lovetta is a Secretary based in our London office and works to support our Banking & Finance Litigation team across a variety of matters.
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