SBC News Richard Hayler: IBAS - The Ombudsman from abstract concept to a workable reality

Richard Hayler: IBAS – The Ombudsman from abstract concept to a workable reality

SBC News Richard Hayler: IBAS - The Ombudsman from abstract concept to a workable reality
Richard Hayler – IBAS

Industry leadership, MPs and wider stakeholders are all in agreement that UK gambling requires a sector-specific ombudsman to rectify consumer concerns and reputation.

Betting dispute and settlement expert Richard Hayler Managing Director of IBAS, underlines that the creation of an ombudsman will be no easy undertaking for participants who must understand and accommodate the intricacies of gambling products, practices and services..

As the provider of the UK’s largest gambling consumer complaint handling service, we are encouraged that so many individuals and organisations are bringing forward their own thoughts, some of which echo those we have raised ourselves in the past.

The gambling world always hosts a broad spectrum of views and it’s rare to find a subject that unites everyone, but in the space of less than seven days at the start of July I heard the All Party Parliamentary Group (APPG) for Gambling Related Harm and the Betting and Gaming Council make the same call – “it’s time for a gambling ombudsman.” Such is the apparent need for something new that everyone agrees.

Of course, not everyone necessarily imagines the same thing. To some extent, the vaguer the description of the concept the easier to rally people to the cause.

I was invited to attend a meeting of the APPG on 1st July. I was grateful for the invitation and I still am, but it was clear that nothing I could have said would have changed the conclusion-reaching process. “You should have known you were in for a tough time coming here today”, said Chair Carolyn Harris. I admit that I’d hoped I wouldn’t be!

“Tell me who funds IBAS?” Harris asked. I doubt it came as news when I explained that IBAS was industry-funded, but she shook her head in disdain. She made it unmistakeably clear that the group could never support an “industry body” considering consumer complaints. What was needed was a new, statutory ombudsman, which should be funded by a levy. It wasn’t clear what the source of the levy should be, but presumably it wouldn’t come from the gambling industry. The unequivocal conclusion was that there should be a new ombudsman and it should be statutory.

It must be said that the vast majority of ombudsmen are funded by the industries or businesses under their jurisdiction. The Financial Ombudsman, the model recommended for gambling by the House of Lords Select Committee, is funded by the financial services industry. The Financial Ombudsman is also a statutory ombudsman. Another of the APPG’s members observed that statutory powers were no guarantee of effectiveness, perhaps in reference to public criticisms made by the group of other statutory bodies.

Meanwhile, on 5th July, the Betting and Gaming Council (BGC) also called for the creation of a new gambling ombudsman.

The BGC’s position was not heavy on detail either, saying: “We hope that the Government will look favourably on our calls for a Gambling Ombudsman to be established as soon as possible following the conclusion of the Gambling Review.”

None of us know how long it will take for the government’s gambling review to be completed, but if the establishment of a new ombudsman begins as soon as the review is over it is hard to imagine it opening its doors before 2023.

That will be concerning, I suspect, for some of those who participated in the APPG discussion. The meeting included powerful personal testimony. There was hope expressed that an ombudsman could “save lives”.

Next-level consumer protection – but an ombudsman?

I wonder whether consumer expectations for an ombudsman have been influenced by the publication of the Centre for Social Justice (CSJ)’s report back in May. Not A Game set out a vision of an ombudsman that worked hand in hand with financial institutions to monitor the spending of consumers and intervene when problematic gambling appeared to be taking place.

If you haven’t had the chance to read the report, its pages 26 & 27 set out a striking vision worth reading. Here is a brief extract:

While the interventions for “James” are beneficial, he continues gambling. Soon he starts to miss priority bills and is spending a large percentage of his salary on gambling products. As this problematic behaviour continues, James enters into debt so that his car is not repossessed. At this point, and in reaction to a further notification by the bank of an escalated level of harm, the ombudsman assesses the situation and realises that James is about to lose his both his car and energy supply in the next month unless something is done. The ombudsman may now choose to notify all gambling operators that accepting bets from James is unsafe. Once this decision is made, the ombudsman will contact James to inform him of this decision and provide details to gambling treatment centres.

Credit must be given to the CSJ for providing depth and context to its proposals, which might delight some and frighten others. It is a concept that pushes the boundaries of legitimate personal data sharing, which will inevitably raise civil liberties concerns but yet might, crucially, contribute towards saving people from significant potential harm. It is bold and innovative. What it isn’t, however, is an ombudsman.

An ombudsman will try to help reduce or prevent consumer complaints by feeding back learnings to the bodies or businesses it works with, but its primary purpose isn’t preventative. An ombudsman exists to help where things go wrong – not to stop them going wrong.

Quite apart from anything else, if the Gambling Ombudsman was responsible for providing a safety net to the likes of ‘James’ in the example above, there would be an immediate need for an ombudsman for the ombudsman. If someone was allowed to gamble to clearly unaffordable levels the grievance would be legitimately directed at the body that was designed to protect them.

Why do we need an ombudsman? What’s wrong with what we already have?

The difficulty with the existing system is that it leaves a crucial gap in the industry’s redress system. Currently, the standards that approved providers of Alternative Dispute Resolution (ADR) must adhere to explain the difference between disputes (largely matters relating to consumer contracts) which ADR providers should deal with and complaints (largely relating to alleged breaches of licence condition) which are referred to the Gambling Commission as a regulatory matter.

Where that falls down is that the Commission does not investigate individual complaints and issue decisions on each. It uses complaints to guide its regulatory investigations but it never says “this person was treated unfairly and they should receive redress”. Taking a complaint to the Gambling Commission is unlikely to give any sense of closure to the complainant.

It is hard to envisage any complaints handling service, ombudsman or otherwise, being able to take on every gambling-related dispute. There are some issues that may need to be investigated by the police and some which require might justify the legal scrutiny of a court. But the number of cases that are currently being turned away from ADR can be significantly reduced.

More to an ombudsman than gambling harms

Please don’t take acknowledgment of room for improvement as an acceptance that the current system has failed. Over 80% of the requests for ADR that IBAS received last year fell within our current remit. We have formally considered over 82,000 disputes during our 23 year history by either adjudicating or helping to find an amicable compromise. We provide informal advice to consumers via email and telephone. Our service was uninterrupted during 2020, helping us avoid the headline grabbing backlogs that some ombudsmen now face. We provide regular insight to the Gambling Commission and advice to businesses on how future disputes might be avoided. We signpost people who need different types of assistance or support to other services better equipped to help them.

Whether IBAS does or doesn’t have a role in a future complaints handling structure, an ombudsman or otherwise, we must be careful not to focus exclusively on helping vulnerable people or people in financial difficulty. We must remain focused on the fairness as well as the safety of gambling, on providing ongoing advice and feedback to the regulator, consumers and businesses. It’s only human to worry more about what we don’t have but we must be careful not to jeopardise the parts that can and do already work effectively – or take for granted that a new service will be able to be provided to an equivalent or better standard by a different group of people.

When you read details of a gambling dispute in a newspaper or on social media, you are often seeing the most extreme examples of bad practice; the cases which ought to be bread and butter for a properly-resourced ombudsman. We can testify that the real challenge comes in the borderline cases, those where you can understand both the grievance and defence of the actions which led to the grievance. It is there where clear legal or regulatory guidance is most valuable.

Tackling the unanswered questions

In the end, it will be for government to decide, as part of its review, what redress system is needed for the gambling sector. We are aware though that this is only the start of the process. There is a great weight of significant legal and ethical questions to explore in order to transform an idea into an effective, functioning service. How do we turn ideas and theories into something practically achievable?

We see no reason why IBAS should not begin considering those questions. If the decision is made that a different approach or new body is needed, we’ll hand over our work to those charged with that future responsibility. Hopefully we will have given it at least something of a head start. We will look to address some of the many difficult questions we have heard asked or which we have asked of lawyers, regulators or consumers without receiving the emphatic guidance we might have wished for.

We will publish examples of some of those questions on our website in the coming weeks, to invite comment and input from interested parties.

We will address them with relatively little applicable case law or legislation to guide us. We don’t promise to reach conclusions on every subject, but we believe that it is in everyone’s interest to begin exploring them now.

When we have made enough progress we will report on what we have concluded and invite further input from everyone with an interest in the subject. Anyone who wants to contribute will be welcome to meet with us or share their thoughts and ideas for practical solutions.  Our contact details can be found on the IBAS website.

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