The ethical investing arm of the Uniting Church, UCA Funds Management, has called on Australia’s four big banks to immediately stop credit cards being used for online gambling after the country’s major banking association said it would support laws to ban the practice.
The Australian Bankers’ Association (ABA) Executive Director of Retail Policy Diane Tate told the Payments Compliance website earlier this week that the association would support laws preventing credit cards from all providers being used for online gambling.
UCA Funds Management, which has been campaigning for the past 12 months to stop credit-fuelled gambling, said the big banks didn’t need to wait on the politicians before doing the right thing.
“While the ABA’s support for a ban is welcomed it does raise the question as to why the banks need to wait for a legislative fix while they can get to work now and encourage a debit only approach,” Mr Walsh said.
“Preventing the use of credit cards for gambling is easily done and we would argue that the banks should not continue to facilitate, extenuate and profit from the financial hardship of problem gamblers.”
Mr Walsh pointed out that a number of banks and other credit providers have already put a stop to lending money to gamble.
He also said gambling on credit magnified the debts that problem gamblers accrued.
Full text of UCA Funds Management statement
Ethical investor UCA Funds Management is asking Australia’s big four banks to implement a debits only system for the operation of online gambling accounts. This follows in-principle support for legislation to stop credit card gambling from the Australian Bankers’ Association (ABA).
The ABA’s Executive Director of Retail Policy Diane Tate told the Payments Compliance news website earlier this week that the association supported a legislative restriction.
“This restriction would have to be done using technology through the card schemes system so the restrictions would apply to all credit card providers, not just banks,” she said.
UCA Funds Management Executive Director Michael Walsh said banks were capable of stopping the use of credit cards for online gambling. Citibank, American Express, the Bank of Queensland and Bendigo Bank have already implemented this restriction.
“While the ABA’s support for a ban is welcomed it does raise the question as to why the banks need to wait for a legislative fix while they can get to work now and encourage a debit only approach,” Mr Walsh said.
“Preventing the use of credit cards for gambling is easily done and we would argue that the banks should not continue to facilitate, extenuate and profit from the financial hardship of problem gamblers.”
Mr Walsh said there was no financial merit for those using credit cards for gambling purposes
“Wagers placed using credit cards are considered cash advances, resulting in additional charges applying to the cardholder trapping them in an even greater spiral of debt,’’ he said.
“When repaying the credit card debt, the credit card must be paid out entirely before the cash advance rate is reset.”
In the past year UCA Funds Management has joined with a group of institutional investors and community organisations to encourage the four major banks to implement a debit only approach to credit card gambling.
Director of the Uniting Church’s Justice and International Mission unit Mark Zirnsak welcomed the ABA’s support and called on the government to progress legislation.
“Changing the law so all banks cannot allow for credit cards to be used for gambling would greatly reduce the harm from gambling and create a level playing field between the banks,” Dr Zirnsak said.
“Credit betting is already banned for almost all forms of gambling, with online gambling being the exception. The government needs to stop pandering to the demands of the online gambling businesses at the expense of the well-being of the community.”
Dr Zirnsak said research from Financial Counselling Australia found large credit card debts caused by gambling had resulted in an increase in suicide and the breakdown of families.
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