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More fines for gaming sector
Poor customer screening is exposing gaming companies to large regulatory fines, according to LendingMetrics’ David Wylie. The firm’s Commercial Director said that the recent £19.2m fine of William Hill for ‘widespread and alarming’ social responsibility and anti-money laundering failures, highlighted what is a worrying issue in the gaming industry. ‘There are too many operators who are not paying enough attention to how much more regulatory oversight there now is in this sector. The era of insufficient client checks in this industry is over. This is not something that you can avoid, as this gigantic fine has shown,’ he said. Failures identified by the regulator included allowing a customer to open
a new account and spend £23,000 in just 20 minutes without any checks. Another social responsibility failure identified was failing to conduct any checks and allowing a different customer to open an account and spend £18,000 in 24 hours. A third customer was able to spend £32,500 over two days, also without any checks. LendingMetrics has been having conversations with gaming operators over the past four years designed to alert them to the dangers of much tighter consumer safeguarding and affordability checks. ‘I have been telling them of the uncomfortable similarity with the payday lending sector, in which there were many successful firms that did not see the massive effect regulation was going to have on their business models. They did not have the technology in place to meet the new standards, and this led to large
numbers of them being hit by fines and mis-selling claims.’ It is essential that gaming providers ensure they have real-time checks in place that include all key income and spending data, and they must always be able to point to a convincing electronic audit trail to justify their actions. ‘Those that do not invest in technology, such as our own ADP, are going to find things very difficult going forward.’ A spokesperson for William Hill parent company 888 said that the settlement relates to the period when William Hill was under the previous ownership and management. The company was purchased by 888 from Caesar's Entertainment in July 2022. After William Hill was acquired, the company quickly addressed the identified issues with the implementation of a rigorous action plan.
Apple takes a bite out of BNPL
The predicted move by tech giants into finance has begun, with Apple announcing the launch of a buy-now pay-later offer. Apple Pay Later went live at the end of March when a select group of US consumers received invitations to join the scheme. The lending facility is tapped via the Wallet function of the iPhone and allows users to pay for online goods and in-app services in four payments spread over six weeks. It will become more widely available to US consumers in the weeks ahead, but a UK launch date has not been disclosed. The zero-interest zero-fee service will be embedded into the iPhone operating system, which accounts for 27% of smartphones worldwide..
Loans of US$30-1,000 are provided through the wholly-owned subsidiary Apple Financing, but since Apple lacks a license to issue payment credentials, Mastercard is allowing access to its network. Users can apply for a loan within Wallet with no impact to their credit. They will then be prompted to enter the amount they want to borrow and agree to the Apple Pay Later terms. A ‘soft credit pull’ will be conducted during the application process to check the consumer’s financial position before taking on the loan. After a user is approved, they will see the Pay Later option when they select Apple Pay at checkout online and in apps on iPhone and iPad, and can use Apple Pay Later to make the purchase. Once Apple Pay Later is set up, users can also apply for a loan directly at the checkout when making a purchase.
Users will be able to view, track and manage all their loans in one place. With Apple Pay Later in Wallet, they can see the total amount due for all of their existing loans, as well as the total amount due in the next 30 days. They can also choose to view all upcoming payments on a calendar in Wallet to help track and plan payments. Before a payment is due, users will receive notifications via Wallet and email so they can plan accordingly. Borrowers will be asked to link a debit card from Wallet as their loan repayment method. Apple says credit cards will not be accepted.
06 | RedAmberGreen
Q1 | 2023
www.lendingmetrics.com
RedAmberGreen | 07
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