Credit and Gambling - Email to Lloyds TSB Bank Group Chief Executive, Antònio Horta-Osòrio.

Email (and response) to Antònio Horta-Osòrio, Lloyds TSB Bank Group Chief Executive on the topic of credit and gambling.

Response and follow up email:

Dear Mr Franklin

Thank you for your recent email.

Request #1: Decline credit/charge card transactions to Merchant Code (MCC) 7995

There are a large number of our customers who gamble responsibly and whilst I appreciate the reasons that you are requesting this change to our process we do not have any plans to restrict future card transactions.

Request #2: Form for self exclusion of debit/prepaid card transactions to Merchant Code (MCC) 7995

As mentioned in #1 we do not have any plans to restrict future card transactions but we will continue to act upon information received from customers and/or relatives which indicate there is a gambling problem.

I hope that you will understand the reasons for our decision and I would like to add that we are continually reviewing and changing our lending policy and we will certainly consider your views going forward.

Nick Corderoy | RL Front Line Manager | Customer Services Bristol
Canons House, Bristol TNT 22
Tel: 0845 600 9815 | Extension ID 1580026| FAX: 0117 943 3055|Email: deleted@lloydsbanking.com

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From: deleted@aol.co.uk [mailto:deleted@aol.co.uk]
Sent: 29 February 2012 12:01
To: Corderoy, Nick
Subject: Re: Irresponsible lending practice complaint

Dear Mr Corderoy,

Thank you for your email dated 24 February 2012 in reply to my email to Lloyds TSB Group Chief Executive, Antònio Horta-Osòrio.

Request #1: Decline credit/charge card transactions to Merchant Code (MCC) 7995

In regard to your response I note that Lloyds TSB lending policy is to 'not knowingly lend for speculative purposes.'

In view of the bank's position I am writing to request the bank updates its procedures to decline card transactions to Merchant Code (MCC) 7995 Betting/Casino gambling where to do so creates a lending position. eg. all credit/charge card transactions, or debit card transactions where an overdraft would be incurred.

Request #2: Form for self exclusion of debit/prepaid card transactions to Merchant Code (MCC) 7995

Turning to the points you make in regard to the bank being made aware about a client with a gambling problem I would like to suggest best practice the bank could adopt both proactively and reactively.

• Request form that a client can complete to self exclude all Lloyds Bank TSB cards (debit/prepaid) from being used for purposes of Merchant Code (MCC) 7995 Betting/Casino gambling transactions.
• The form would be supplied on request by a client, or the bank would inform the client of the existence of the form where the bank is made aware of the clients gambling addiction/problem.

The completion of the self exclusion form for debit/prepaid cards would be entirely voluntary on the part of the client and could be revoked with a reasonable period of notice. (eg. one month)

As stated in my previous email gambling addiction/problem is an illness that affects many hundreds of thousands of people in the UK. I look forward to confirmation that the bank will adopt the best practices above as part of its responsible lending and ethical/corporate citizen best practices. It makes a difference to the lives of many who suffer with gambling addiction, and for many who might not as a result of the above actions of the bank today to create a better tomorrow.

Best Regards,

Anthony Franklin.

http://www.grasp-group.org/

-----Original Message-----
From: Corderoy, Nick <deleted@Lloydsbanking.com>
To: deleted <deleted@aol.co.uk>
Sent: Fri, Feb 24, 2012 1:47 pm
Subject: Irresponsible lending practice complaint

Dear Mr Franklin

Thank you for your email dated 20 February 2012 addressed to our Group Chief Executive, Antònio Horta-Osòrio. I have been asked to respond to your concerns by our Group Chief Executive's Office as my team  deal with issues relating to our lending policy and the implications of our customers taking on debt because of their addiction to gambling.

Firstly I would like to mention that it is for our customers to decide how to spend their money and although we will not knowingly lend for speculative purposes, if a customer has chosen to incur debt by spending on gambling transactions, that does not automatically mean that the bank is at fault.

However, where we have received prior notification of a customer's addiction to gambling, either from the customer or a representative such as a family member, and we have failed to restrict borrowing, which leads to further debt being incurred, then I consider that we are at fault.

If a customer advises us that they have a gambling addiction we would place restrictions on future borrowing.

I appreciate that you have concerns over gambling debts being incurred on credit card borrowing or on overdraft via the use of a debit card. As I have mentioned earlier it is for our customers to decide how to spend their money but if we are aware of a gambling addiction then we would place restrictions on the account.

I hope that I have clarified our position in respect of gambling debts but if you have any further questions please contact me.

Nick Corderoy | RL Front Line Manager | Customer Services Bristol

Canons House, Canons Way,  Bristol. BS99 7LB

Tel: 0845 600 9815 | Extension ID 1580026| FAX: 0117 943 3055|Email: deleted@lloydsbanking.com

Original Email:

Anthony Franklin

Email address deleted

Antonio Horta-Osorio

Group Chief Executive

Lloyds TSB Bank plc

25 Gresham Street, 
London EC2V 7HN.

20^th February 2012.

Dear Mr Horta-Osorio,

I am writing to ask for your leadership to discontinue a highly irresponsible lending practice of allowing gambling to be funded through borrowing and in particular the use of payment cards linked to any form of credit. (Credit Cards, Debit Cards linked to overdrafts etc.)

The case for taking a lead to discontinue such practices is set out as follows:

1.   UK banks are committed to responsible lending practice. Lending for the purposes of gambling can hardly be viewed as responsible lending.

1.1. If an individual walked into a Lloyds TSB branch and applied for a £20,000 loan with declared purpose to use the funds for gambling then the bank would decline the application. So why should paying by credit card for gambling transactions be viewed any differently.

2.   To protect vulnerable individuals who have gambling problems from running up huge debts. 

3.   It is in the interest of society that this practice should be disallowed. 

3.1. The financial crisis has demonstrated the cost to the tax payer when banks make bad lending decisions. I don’t believe that the average tax payer wants to see their bank deposits, taxes, or bank charges being used to indirectly pay-off debts of problem gamblers.

The case has nothing to do with restricting an individuals’ freedom of choice to spend money on gambling activities. I recognize that for many people gambling is an enjoyable recreational activity. Nevertheless where the bank knows that credit is being used to fund gambling activity I believe that the case stands as above.

The argument that credit cards paid in full in each month are in some way exempt from the lending argument is not valid in my view as credit is extended from the moment a transaction is posted to an account to the point at which the balance is paid off. The banks know this and thus operate a credit scoring process to assess an individual’s ability to repay.

The British Gambling Prevalence survey said that an estimated 0.9 per cent of the adult population (by one measure) or 451,000 people – could be classed as a problem gambler, up from the 0.6 per cent - or 300,000 - recorded in 2007 and 1999. So this is a significant problem affecting very large numbers of families (and society) in the UK. With Lloyds TSB being more than 40% owned by the taxpayer (or families of UK) I hope this is an issue you will take seriously that the bank should operate in a fair and ethical manner within the society it operates.

In summary I cannot think of a more extreme example of irresponsible lending than knowingly allowing borrowed funds to be used to place bets.

I do not seek to advocate a total block to payment cards (Debit cards, Pre-Pay Cards) being used to pay for gambling transactions as I believe people have a right to choose how to spend their own money. Clearly though the banking industry has an obligation both to its shareholders, and stakeholders including society as a whole, to ensure that it lends in a sustainable, ethical and responsible manner.

I hope that you can agree and that with your leadership Lloyds TSB can immediately review this issue with a view to discontinuing the practice of allowing credit to be accessed through cards to pay for gambling transactions.

I believe that this is a fantastic news opportunity for Lloyds TSB to spread a positive message of responsibility and improved business practice and will set a precedent for other banks to follow suit.

I am happy to provide any further information that you need, I can be contacted by email at (deleted) please feel free to review my blog for further information at http://responsiblegambling1.blogspot.com/.

Yours faithfully,

Anthony Franklin.