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Investigation on Whether Banks Should offer Credit to Problem Gamblers

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Mitchell Spiteri, a former problem gambler, last placed a bet over a year ago. However, it hasn’t been easy to stay away. Considering that his problem gambling started early, at the age of 18, gambling started taking over the young man’s life. By the time Spiteri reached the age of 20, he was placing bets on a daily basis through online casinos.

Australian Problem Gamblers

Problem Gambler’s Story

Spiteri explains that it took every inch of his will power not to bet as soon as money came into his account. He claims that betting gave him a rush that he found very difficult to control. Stating that it started off small and began to grow exponentially.

He goes on to say that since he was 16, he had been working full time. To which he had a stable income and managed to pay off an AU$5 000 loan. Which essentially made him a great candidate for a loan. However, the National Australia Bank (NAB), had access to all of his personal details. This is where they witnessed the millennial spending hundreds of Australian dollars daily on online gambling sites such as Ladbrokes and Tom Waterhouse, along side other online casinos and pokies sites.

Spiteri expresses that at one of his lowest points during his gambling problem, he received a letter in the mail. It was from the NAB explaining that he could have AU$25 000. He goes on to say that obviously, in his addictive gambling state, he jumped at the chance and had the money transferred into his savings account. This sent him plummeting into deep debt as he quickly lost all of the money.

Banks Capitalising on the Problem?

Spiteri claims that when he was offered the loan he was in a state of high vulnerability and the banks could see this as they followed his transactions. Since then, NAB has passed on Spiteri’s debt to a debt collector. Spiteri’s father has additionally, become a guarantor and taken out a second personal loan that he is working to pay off.

Pauline Smith, Spiteri’s financial advisor, was outraged when she heard the news, claiming that the bank should have done a check. She goes on to say that the bank could easily see how and what his money was being spent on daily, indicating that he clearly had a gambling problem, if not an addiction.

Yet when the matter was taken to the NAB, a spokesperson simply commented that based on his income and expenses the bank assessed him as a candidate who could afford the loan.

Do Banks Have a Responsibility to Vulnerable Clients?

From effect of the 17th of February, through federal legislation, gambling companies will be banned from awarding problem gamblers with credit. Yet, these laws do not extend to banks, which means banks can still provide their clients with credit through their credit cards, personal loans and overdrafts, whether they are problem gamblers or not.

However, according to the Financial Counselling Australia (FCA), it is not responsible for a bank to grant a loan that they can see will be spent on gambling. Further, banks should not be trying to catch their clients out but rather, assist them where they can, by being ethically responsible to the needs of the client.

Free Roam for Online Gamblers

Although restrictions have been put in place for gambling, like buying lotto tickets and going to the casino. Nothing has been done for the online gambling space. For example, players will be unable to buy a lotto ticket or gamble using a credit card. However, the online gambling space holds no such restrictions. Yet, certain banks like, Citibank, Bank of Queensland and Bendigo Bank, have made it their policy to ban their credit cards from being used for online gambling.