Independent Tasmanian MP Andrew Wilkie has joined ethical investor UCA Funds Management in its campaign to stop the big four banks allowing problem gamblers to use credit cards to fund their addiction.
UCA Funds Management has been working with a group of institutional investors and community organisations for several months to have the practice outlawed. They have engaged with the four major banks but as yet none have agreed to block their credit cards from being used on online gambling sites.
UCA Funds Management Executive Director Michael Walsh said there was no win 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 and benefits like the accumulation of frequent flyer points do not exist for those choosing credit cards when they gamble.”
Mr Wilkie, who stood alongside UCA Funds Management at a Parliament House media conference today, said the practice was unethical and must be outlawed immediately.
“No wonder the big four banks have become public enemy number one in Australia,” Mr Wilkie said.
“Here is yet another example of them putting their billion-dollar profits and million-dollar salaries before the wellbeing of their customers.
“Banks have a duty of care not to allow their customers to rack up huge credit card debts gambling. These debts can have devastating consequences including family breakdowns, homelessness, crime and even suicide.
“It’s just not good enough for the banks to say no to this. Preventing the use of credit cards for gambling is easily done technically and would barely make a dent in their profits. In other words this matter really comes down to the character of the banks.”
Mr Walsh said an April 2016 Financial Counselling Australia report discovered that problem gambling predominately fell into two distinctive categories: gamblers with losses of $20,000 or less (45 per cent of case study), or client losses in excess of $60,000 (30 per cent of case studies). It also uncovered a number of common issues associated with problem gambling including:
- An inability to pay bills or debts,
- Relationship breakdown and issues such as family violence,
- Involvement in fraud and crime, and
“UCA Funds Management believes that Australia’s banks, which in turn run the payments system, have a social responsibility not to facilitate, extenuate and profit from the financial hardship of problem gamblers,” Mr Walsh said
“As such we would encourage them to remove customers’ abilities to use their credit cards for online gambling.”
Mr Walsh said his organisation was not opposed to gamblers using debit cards or the POLi Payments system run by Australia Posts as alternatives. These allow people to gamble with money they already have, as opposed to using credit.
He said some providers − such as Citibank, the Bank of Queensland and Bendigo Bank − already stop gambling purchases from being transacted on their credit cards.
As Citibank provide credit to Virgin, Suncorp and Diners, to name a few, those providers also don’t allow gambling purchases