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ANZ Takes Further Steps in Gambling Limits
Australia and New Zealand Banking Group Limited, better known as ANZ, is furthering its efforts to limit the amount of debt that a credit card holder can accumulate due to gambling.
This follows news steps taken by Macquarie Bank just weeks ago, all amidst growing pressure from anti-gambling organisations, responsible gambling groups, and even lawmakers concerned with ever-growing numbers of gamblers in Australia with addiction problems..
Latest Move from ANZ
ANZ serves customers in Australia and New Zealand. As one of the largest financial institutions in the region, it decided to update its gambling guidelines to “help minimise potential customer harm from gambling when using a credit card.”
The bank updated its Credit Cards Conditions of Use per its Clause 8.2 to restrict any transactions associated with gambling or gaming.
Starting July, credit cards at 85%+ limit usage are declinable. Or if the requested transaction would increase that person’s balance to 85% or more of their credit limit.
This is a response to more players gambling online and accumulating debts relating to gambling. Specifically, smartphone gambling usage for online gambling has increased by an average of 15% per year and is one of the fastest growing markets.
In addition, a research from Roy Morgan one year ago noted that more than one-third of Australians who make any type of bet or wager do so through the internet.
The changes were originally going to be effective in December 2018 but took longer to implement than originally anticipated.
Examples by ANZ
The ANZ website provides two examples of declinable transactions.
First, a woman with a $5K limit on her credit card already accumulated $4,250 of purchases on the card. She tries to bet $10 on a horse race. However, she has her credit card transaction declined. That’s because of her balance already being at 85% of her limit.
Second, a man with a $5K credit card limit spent $4,200 on various purchases before trying to place a $100 bet at a casino with that card. If processed, their credit limit balance would otherwsie increase to 86%.
Credit Card Rules Related to Gambling
AMZ regulations contained within Clause 8.2 in the Credit Card Conditions of Use include:
- May block or refuse to process any gambling transaction without incurring any liability.
- Will publish guidelines outlining reasons for blocking gambling transactions, and will notify the account holder of changes.
- May identify any transaction as related to gambling via merchant information or that from intermediary financial institutions. This often includes news agencies, merchants that sell lottery tickets, and online gaming-related companies.
- Not required to block gambling transactions.
- Declined gambling transactions can be challenged if proof can be provided that the purchase was not related to gambling.
Following Macquarie’s Lead
The ANZ changes were considered before most other large banks made such a decision. However, it was Macquarie Bank that implemented its changes several weeks ago.
On July 1, Macquarie announced that all gambling charges would be blocked when customers attempt to use credit cards for those purchases. It would use merchant codes that are registered to gambling and lottery merchants as the trigger for rejecting the charges.
But what happens if a merchant mis-represent its offerings or services by using an alternate merchant code? Apparently, there is little that the bank can do to identify those merchants until they are properly flagged.
Macquarie went further than ANZ, though, by capping cash advance balances for all credit card holders. That change will be effective at the end of August 2019, with the new balance cap set at $1K.
More Banks Targeted
It is uncertain whether more banks follow the lead of ANZ and Macquarie. Groups like the Alliance for Gambling Reform have challenged the banks to do this. With those two major institutions stepping up, the focus is now on lobbying others. This includes the likes of CBA (Commonwealth Bank of Australia), NAB (National Australia Bank), and Westpac Banking Corporation.
The goal is to stop allowing gamblers to stack debt upon debt for the purpose of gambling. It will also prevent financial institutions from beneffiting from interest charges and fees from cash advances. Further, groups like AGR want more merchant codes to reflect gambling purposes, even if those merchants are pubs and clubs that receive some revenue from food and drink.