SBC News Voice of the Sports Betting Industry
The UK Gambling Commission (UKGC) has notified online licensees of compliance expectations and duties concerning customer account withdrawals.
An update published by Commission CEO, Andrew Rhodes, references previous concerns about customers experiencing ‘delays when withdrawing funds’. As noted, late or delayed withdrawals are referenced as an action point of the Commission’s Business Plan and Budget 2023 to 2024.
Concerns about account withdrawals are highlighted due to the UKGC’s contact centre “continuing to receive around 2,000 complaints a year about delays to withdrawals.”
Compliance reviews have seen the Commission order operators to amend their terms and conditions, requiring ID verification prior to customer deposits, rather than “delaying identity verification until a customer seeks to withdraw funds.”
Withdrawal issues take on an industry-wide scope, impacting all online operators, yet the Commission maintains that overall complaints remain low in proportion to the total amount of completed withdrawals. Yet concerns remain as withdrawal delays are the leading cause of complaints, also highlighted by the Alternative Dispute Resolution (ADR) scheme.
Online licensees were warned that it is a compliance breach to introduce friction when a customer tries to withdraw from their account rather than when they deposit into the account, or to place the operator’s commercial interests over those of their customers.
Following casework, the Commission continues to find issues related to the criteria of lack of transparent T&Cs, unclear guidance on customer notices, and information requests.
Of concern: “Operators often do not provide their customers with any reason as to why they are requesting additional information from them. They sometimes advise customers that information is being requested “for regulatory purposes.”
Online licensees must provide accurate guidance and fair terms and conditions on the key criteria of customer information requests, use of third-party methods, and the procedure for delaying withdrawals and confiscating funds.
Information requests require processing prior to the customer’s deposit and should not be requested at the point of withdrawal. Licensees must explain if a withdrawal is delayed due to a Source of Wealth (SOW) or Source of Funds (SOF) verification.
On confiscating funds, the Commission notes that it has been “made aware that operators sometimes seek to confiscate the whole of a customer’s deposit balance, either because they suspect that the account is associated with criminal activity or because they think their own terms and conditions have been breached.”
When confiscating funds, operators must observe the rules of the Proceeds of Crime Act 2002 (POCA), reporting known or suspected money laundering to the NCA and wait for appropriate consent before proceeding with transactions. Operators were reminded that confiscating or returning funds without submitting a Suspicious Activity Report (SAR) and obtaining a Defence Against Money Laundering (DAML) can result in committing principal money laundering or terrorist financing offences under POCA or the Terrorism Act 2000 (TACT).
Delaying withdrawals or confiscating funds cannot be used as a deterrent, as online licensees must ensure fair treatment of customers by not using AML procedures to frustrate withdrawals.
The Commission will continue to monitor compliance and support the industry in understanding consumer interests, in which operators must regularly review their terms and practices on withdrawals to ensure fairness and compliance.
Rhodes concluded the update by noting: “Our Corporate Strategy for 2024 to 2027 highlights the most important work we intend to deliver over the next three years and outlines that we will be investing further resources into identifying risks and opportunities relating to the fair and open licensing objective, and to the regulatory outcomes that link to this objective.”
