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Gambling Disputes - Grounds for Refusal

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When Can We Refuse to Deal with A Dispute

    Grounds for Refusal to Deal with A Dispute

    The ADR Regulations refer to disputes about contractual obligations in sales or service contracts. In LCCP and our associated guidance, we clarify that ADR providers may consider ‘disputes’. These are complaints about the customer’s gambling transaction (including management of the transaction and related customer accounts) that have not been resolved at the first stage of the gambling business’s complaints procedure.

     

    ADR Regulations – ground to refuse to deal with a complaint

     

    The ADR Regulations list the only grounds under which an ADR provider may refuse to deal with a dispute (ADR Regulations Schedule 3, paragraph 13). Text shown in italics is quoted directly from the ADR Regulations. 

    • Prior to submitting the complaint to the body, the consumer has not attempted to contact the trader concerned in order to discuss the consumer’s complaint, and sought, as a first step, to resolve the matter directly with the trader.

    Consumers must first approach the gambling business to attempt to resolve a complaint before escalating to ADR. Gambling businesses are generally required as a condition of their licence to resolve the complaint, or agree that no resolution can be reached, within a maximum time of eight weeks from receiving the complaint.2 If the complaint remains unresolved at this stage, the business should issue a ‘deadlock letter’ or final letter to confirm that the consumer has attempted to resolve the matter with the business and may now escalate the matter to ADR. This applies whether or not the consumer has fully exhausted the business’s complaints procedure at the eight-week stage.

    •  The dispute is frivolous or vexatious.
      The ADR provider may determine whether a dispute is frivolous or vexatious, and if so, refuse to deal with it. The gambling business may not refuse to refer a consumer’s complaint to an ADR provider on these grounds.
    • The dispute is being, or has been previously, considered by another ADR entity or by a court.The ADR system is intended to be a light-touch alternative to court proceedings. It is not intended to provide parties to a dispute with repeated opportunities to achieve a different outcome. If the consumer is not satisfied with the decision of an ADR provider, they have the option to refer the matter to a court.
    •  The value of the claim falls above or below the monetary thresholds set by a body. In our case this is 10,000.  Gambling disputes can vary in value quite significantly. ADR providers should ensure that monetary thresholds set do not significantly restrict consumers’ access to ADR.
    • The consumer has not submitted the complaint to the body within the time period specified by the body, provided that such time period is not less than 12 months from the date upon which the trader has given notice to the consumer that the trader is unable to resolve the complaint with the consumer.
    • Dealing with such a dispute would seriously impair the effective operation of the body.

    An ADR provider might refuse to deal with a dispute that raises difficult legal issues fit for determination by a court (which might set a precedent). Similarly, a provider might refuse a dispute that is more properly determined by a regulator, such as the Commission. The ADR provider should not be considering potential breaches of gambling licence where there is no transactional/contractual element to make the matter a dispute. However, the provider should consider whether there are contractual/transactional aspects that the provider could consider.

    • But see Social responsibility code provision 6.1.1.2 in LCCP, which permits a gambling business to ‘stop the clock’ on the eight-week time limit where a consumer fails to engage with the process within a reasonable timescale.
    • Where we refuse to deal with a dispute, within three weeks of the date upon which we received the complaint file, we will inform both parties and provide a reasoned explanation of the grounds for not considering the dispute (ADR Regulations Schedule 3, para 15).
    • The complete complaint file is made up of all the documents containing the relevant information relating to the dispute (ADR Regulations Schedule 3, para 6(c)). This does not include any additional comment made by a party to the dispute on the arguments, evidence, documents and facts put forward by the other party to the dispute.
    • We ensure that our policy regarding when we will refuse to deal with a dispute, including in relation to any monetary threshold it sets, does not significantly impair consumers’ access to our alternative dispute resolution procedures (ADR Regulations Schedule 3, para 14)

    This policy does not cover non-contractual complaints. We refuse such complaints if we have not made an agreement with the business to consider them.

     

    Please note the position regarding regulatory matters:

    Types of disputes linked to regulatory matters could include (please note that these examples are not exhaustive):

    • Non-payment of winnings/ account suspended due to anti-money laundering (AML) concerns.  We expect ADR providers to consider the dispute based on the gambling business’s actions and the available evidence from both parties. The ADR provider does not need to know whether the gambling business has submitted a Suspicious Activity Report (SAR) to the appropriate authority to do this, and the gambling business should not disclose this information to the provider. If the ADR provider decides the dispute in the consumer’s favour, the gambling business should pay the consumer/return the consumer’s funds. Where the business continues to suspect or knows that the customer is laundering money, they may do this by submitting a defence against money laundering (DAML) SAR, requesting a defence for potential money laundering offences in respect of the transaction in question (that of paying off the customer). If consent is refused, it will be for the gambling business to seek information from appropriate authorities on what may be disclosed to the consumer. We intend to provide some additional information to gambling businesses to remind them of these obligations.
    • Non-payment of winnings/account suspension due to issues related to fraud or crime, but not money laundering.
      We expect ADR providers to consider the dispute based on the gambling business’s actions and the available evidence from both parties. Relevant considerations could include whether there is an ongoing police or criminal investigation, or the suspicion has been reported to the authorities. Providers should note that unless prevented from doing so by legislation (such as criminal, or linked to data protection), they must be prepared to share the evidence on which they base their decision with both parties to the dispute, as required by the ADR Regulations, Schedule 3, part 7 (Fairness).
    • Account suspended due to failed identity checks/ refusal to comply with identity checksWe expect ADR providers to consider the dispute based on the gambling business’s actions and the available evidence from both parties. ADR providers may wish to consider the nature of the information that the gambling business is requesting the consumer to provide, and whether it appears to be reasonable/fair in accordance with the requirements of consumer protection legislation and money laundering regulations. The provider may also wish to consider the reasons behind and the timing of the request. For example, if a gambling business allows a consumer to continue to deposit funds while refusing to allow him or her to withdraw them, this might cast some doubt on the necessity of the checks. Providers should note that in September 2018 we launched a consultation looking at age and identity verification issues. Pending the outcome of the consultation, we may require businesses to at least verify the basic identity of customers before the customer is permitted to gamble.
    • Non-payment of winnings/account suspended/bet voided due to issues related to suspected irregular betting or match fixing.
      We expect ADR providers to consider the dispute based on the gambling business’s actions and the available evidence from both parties. If a gambling business suspects that a bet is irregular, or that an event has been fixed, they may report the matter to the appropriate authority, including our Sport Betting Integrity Unit (SBIU). The gambling business should decide whether to pay out on the wager. The ADR provider should therefore be able to consider any dispute, based on the evidence provided.
    • Disputing that the gaming machine is rigged or unfair.
      The ADR provider will need to establish any contractual/transactional element of the issue. For example, whether the gambling consumer is disputing that certain transactions they have made have been affected by an unfair game or is just making a general complaint that the game is not fair because they have not won. Where a contractual/transactional dispute is identified, the ADR provider could consider information held by the gambling business, for example, to establish whether a game has been tested, recent evidence of ongoing monitoring of the return to player (RTP), or an audit record of a gaming machine, to consider any transactional element of a dispute. The provider may need to ask the operator to obtain this information.
    • Disputes linked to technical issues
      Technical issues could include, for example, a game that displays a win for the consumer when there was actually a loss, or game or lottery tickets that do not print correctly, etc. A significant number of complaints about the same game/gambling business may indicate a wider problem that would interest us. We expect the ADR provider to consider the contractual/transaction dispute in each individual complaint they receive.
    • Permitted to gamble when self-excluded
      A consumer may enter into a self-exclusion agreement with a gambling business, under which the consumer agrees to exclude themselves from gambling with the business and the business agrees to help prevent the consumer from accessing the gambling facilities. The ADR provider’s role does not include considering whether the business’s self-exclusion policy is effective – this is a requirement of the business’s licence and is a matter for us. However, we expect the provider to consider whether terms and conditions attached to any self-exclusion agreement are clear and fair in accordance with the requirements of consumer protection legislation, and whether it would be clear to the consumer that they were excluded from the channel, platform or premises from which they attempted to gamble.
      ADR providers should note that multi-operator self-exclusion schemes are in operation for both online and land-based gambling sectors. The gambling businesses do not run the multi-operator schemes, and therefore do not have responsibility for the terms and conditions or clarity of the schemes. As a result, complaints related to these schemes are a matter for us.
    • Disputing that the gambling business should have intervened to prevent the consumer from coming to harm/spending their money
      We expect gambling businesses to intervene if a consumer appears to be at risk of being harmed by their gambling. Businesses must take account of a range of factors in determining whether to intervene, such as patterns of play, observed behaviour, language used in communicating, as well as time or money spent to determine whether to intervene, and may need to develop this information over a period of time.
      As a result, it is unlikely that ADR providers will be able to identify a specific contractual/transactional element to the issue.
    • Disputes linked to unfair terms or practices
      ADR providers must consider consumer protection legislation when looking at disputes. We have been working with the Competition and Markets Authority (CMA) to ensure terms and conditions offered by gambling consumers meet the requirements of consumer legislation. This includes, for example, considering whether a contract term is fair, whether the consumer is being unfairly prevented from withdrawing funds and where key terms omitted from marketing or advertising materials may have misled a consumer. The CMA has published its advice to operators and consumers on its website. Further information can be found on ourwebsite. ADR providers need to be aware that although this advice was published in 2018, the Consumer Rights Act came into effect in 2015, and the Consumer Protection from Unfair Trading Regulations (CPRS) have been effective since 2008 and therefore apply to earlier disputes.
    • From 31 October 2018, new requirements for gambling businesses come into force. These require businesses to comply with the advertising codes of practice issued by the Committees of Advertising Practice (CAP). We have worked with the Advertising Standards Authority (ASA) and CAP to deliver key messages and guidance to industry, including CAP guidance on the marketing of free bets and bonuses and responsible advertising. ADR providers should take ASA rulings and CAP guidance into account when considering disputes where these are relevant.
    •  Note that the ADR provider is not required to determine whether the gambling business has breached the terms of its licence or otherwise. The ADR provider may only consider contractual/transactional matters based on the evidence available at the time of the decision.

     

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