New requirements are to be imposed on gambling companies as of 31 October 2018, courtesy of the Gambling Commission. The crackdown is intended to protect consumers by taking tougher action on breaches of advertising rules and consumer protection laws.
The Gambling Commissions new requirements take the form of amendments to its Licence conditions and codes of practice (LCCPs) through new 'social responsibility codes' which relate to marketing and advertising, unfair terms and the handling of customer complaints.
Marketing & Advertising
The LCCPs will include a requirement that all licencees comply with the advertising codes of practice issued by the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP). The Gambling Commission makes clear that the Advertising Standards Authority will remain the responsible lead regulator for enforcing breaches of the codes, but it will work closely with the ASA to ensure compliance.
Further new LCCPs require that licensees ensure that their marketing communications, advertisements, etc. do not mislead consumers by requiring, for example, that all significant conditions which apply to marketing incentives are provided transparently and prominently, and that all terms and conditions are made available for the full length of the promotion. Licensees are prohibited from sending direct electronic marketing to consumers without their specific, informed and withdrawable consent. Additionally, licensees will be held responsible for the actions of third parties with whom they contract for the provision of any aspect of the licensee's business related to the licensed activities.
The Gambling Commission will also continue to work closely with the Competition and Markets Authority (CMA) to combat unfair terms and misleading practices. Licensees will have to ensure that the terms they offer consumers comply with the Consumer Rights Act 2015.
Complying with the Consumer Rights Act 2015 will require gambling companies to: ensure that terms and consumer notices are not unfair; ensure that they are transparent and easy to access; and ensure consumers are notified of any material changes before they come into effect; among other requirements.
Licensees will also have to ensure that they do not commit any unfair commercial practices within the meaning of the Consumer Protection from Unfair Trading Regulations 2008.
Further amendments to the LCCPs will require licensees to have in place appropriate policies for accepting and handling complaints and disputes in a timely, fair and transparent manner. Additional social responsibility codes set out further detail on such procedures. For example, if a complaint cannot be resolved to the customer's satisfaction by the complaints procedure in place within 8 weeks, the company must have arrangements in place for the matter to be referred (free of charge to the customer) to an Alternative Dispute Resolution entity in a timely manner. The licensees must also make information on how to make complaints clear and accessible for customers.
What's the Impact?
Some gambling companies may not see these changes as having too great an impact on their business. After all, they should already be complying with the rules of the various regulatory bodies and legislation identified above. However, the important consideration is that the Gambling Commission will now have greater powers to protect consumers in the enforcement of these provisions. The various regulatory bodies and in the case of legislation, the courts, will remain the primary enforcers of these rules, but the Gambling Commission will be able to take its own, potentially swifter, action. For breaches of its LCCPs, the Gambling Commission may decide to issue warnings, attach restrictions to licences, suspend or revoke licences or impose a financial penalty. With an extra pair of eyes watching over their activities, gambling companies may want to think harder before misleading or treating consumers unfairly.
For more information on this topic, please contact Sonal Patel Oliva or your usual contact within Fieldfisher's Brand Development Team.
Co-authored by Alex Harbin.