‘Gambling blockers’ on customers’ accounts have won plaudits for some financial services firms. But, as the Money Advice Trust’s vulnerability lead consultant Chris Fitch notes, not all blockers are created equally.
Here’s your starter for 10: Which development connects the number 7995, the animated character ‘Hot Chip’, the inventor Jeremiah Chubb, and one Mr JH Holmes of Shieldfield, Newcastle?
Well done. The answer was indeed ‘gambling blocker’ – the feature on some debit and credit cards that once turned on by a customer, blocks certain spending on gambling.
However, here’s the harder question: why are each of them connected? Which of the four arguably shouldn’t have anything to do with gambling blockers? And can blockers really reduce gambling-related harm, or are they a side-issue in a much larger emerging debate?
In 2004, the US Internal Revenue Service (IRS) published Rev. Proc. 2004-43 (Merchant Category Codes to Determine Reportable Payment Card Transactions). This listed a series of four-digit numbers, each of which would signal to payment processors (like Visa and Mastercard) what a customer was spending their money on.
Importantly, 7995 was allocated to expenditure on “Betting – Casino Gambling”. Still used today, this not only created an opportunity to process such payments, but also prohibit them.
Fourteen years later, 7995 met Hot Chip. While not a household name, ‘Hot Chip’ will be very familiar to Monzo’s UK customers. As their animated mascot, Hot Chip features on the Monzo app, often sailing a boat or running at improbable speed. And it was Hot Chip and Monzo (led by vulnerability specialist Natalie Ledward), that created the first financial services gambling blocker to its customers.
Although some banks had previously placed blocks on gambling expenditure, this had been undertaken on an ad-hoc basis following a direct customer request.
In contrast, Monzo were the first bank to offer such a service to all its customers, having listened to a section of its customer base about the help they wanted with their gambling.
Monzo were soon followed by Starling, and then by the more established banking brands including Barclays/Barclaycard, HSBC, Natwest/RBS, Santander, and Lloyds.
Created in 1818, Jeremiah Chubb made the first UK government approved lock that could only be opened by its own key. Featured at the Great Exhibition of 1851, and twice in Sherlock Holmes stories by Arthur Conan Doyle, Chubb locks became world-famous.
But what has this got to do with the emergence of the gambling blocker?
The answer lies in the lockable mechanism. What initially set Monzo apart from other banks’ blockers, was that once ‘turned on’ it could not be unlocked without the customer talking with Monzo about their situation, and then waiting 48 hours before any restrictions were removed. Importantly, this introduction of a ‘lock’ or ‘friction’ proved a dividing line among firms.
Mr JH Holmes
While 7995, Hot Chip, and Jeremiah Chubb (ahem, sort of) have shaped the development of gambling blockers, this leaves John Henry Holmes as our metaphorical fall guy.
Recognised by many as the father of the modern light switch, J.H. Holmes created the ‘quick break’ technology, which allows consumers to switch their lights ‘on’ and ‘off’ as they please.
Of the eight known UK finance firms publicly offering a gambling block, four have mechanisms that can be turned ‘on’ or ‘off’, just like a light switch.
Some have questioned how effective the on/off mechanism is for customers with a compulsive addiction.
Although some firms describe introducing such a switch or toggle mechanism as their ‘first step’ towards a lock, this leaves most UK banking customers with limited protection.
Not the solution
While commentators have noted that spending blockers are not the solution to gambling addiction, gambling blockers do provide one tool that many people experiencing gambling problems, or recovering from addiction, may find useful.
As of this month, credit card payments are no longer being accepted by gambling firms. Giving customers basic controls over their spending on debt cards should be the norm.
At Bristol University, through our Money and Gambling: Practice, Insight, Evidence (MAGPIE) programme, we are researching the most effective blueprint for a gambling blocker. We’ll be ready to publish findings in the spring.
Working with Gamble Aware, this project will address the optimum period for locking spending (48 hours, longer, or permanent?), and providing additional controls over daily cash withdrawals (custom limits/withdrawal visits).
Importantly, MAGPIE will also consider the role that gambling blockers might (and might not) play alongside other interventions – including gambling industry self-exclusion schemes, treatment referral pathways, and peer support and recovery groups.
Light switches and locks
While the introduction of gambling blockers has won some applause, we should, on reflection, defer any standing ovation for a little longer.
Currently, not all gambling blockers are created equal. Most banks don’t offer a blocker or the extra spending controls many customers say they need, to deal with their gambling. And we have little evidence on how effective such tools might actually be.
With 430,000 problem gamblers in Britain today (and more at-risk of developing a problem), firms have a role to play – however, we need to ensure this is the right role, rather than expecting a light switch to act like a lock.