As Australia recently listened to harrowing stories of the major banks providing money to addicted gamblers at the Banking Royal Commission, we recalled that this is not a new issue.
The Centre published a report – Problem gamblers and the role of the financial sector – in 2010 and the issues seem as vexed now as they were then.
In that Occasional Paper #33, commissioned by the Federal Department of Families, Housing, Community Services and Indigenous Affairs, we consulted widely with financial institutions, financial counsellors, gambling counsellors and relevant government departments.
The introduction of a more comprehensive form of credit reporting, encompassing information about past financial behaviour that could signal that a potential borrower may have a gambling problem, was at the top of an extensive list of recommendations.
Another of our key recommendations resonates loudly in light of evidence given to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in the first phase of the Royal Commission’s inquiry in late March.
We recommended: Financial institutions should avoid offering line of credit and credit card products if the person applying seems to have problems managing their finances.
A witness appearing before the Royal Commission in March gave an emotional account of how his credit card limit was increased to $35,000 by the Commonwealth Bank despite advising the bank that he had a gambling problem. Another witness, who said he had a “gambling addiction”, was given a $25,000 loan by the NAB when his bank records clearly showed extensive gambling.
The need for reform remains as relevant today as it was eight years ago and the SA Centre for Economic Studies has drawn the Royal Commission’s attention to our research and analysis on this important issue in a recent submission to its inquiry.