While coronavirus is changing our world in so many ways, if we are able to continue fundraising, we must remain conscious of regulatory frameworks and be sure to comply with any changes that can affect our programmes now and into the future.
The Gambling Commission’s upcoming ban on the use of credit cards for all forms of remote gambling, and for non-remote betting, has raised a number of queries from the not-for-profit sector as to how it will affect society lotteries.
The ban comes into effect on 14 April and aims to help prevent individuals from racking up debts on their credit cards, particularly when gambling online.
No credit card payments “by remote methods”
When the ban takes effect, lottery operators with remote society lottery licences, remote ancillary lottery licences, and remote ELM licences will no longer be able to accept payments by credit card by remote methods, which, under the Gambling Commission’s definition of ‘remote’, includes those made online (such as by a website or app), over the telephone, by email, text message, and fax.
Face-to-face lottery payments by credit card on premises, or door-to-door, will still be allowed (albeit only when F2F fundraising can resume after coronavirus social distancing restrictions are relaxed). So too, sending card details by post is allowed, as this is also classed as a non-remote method of payment by the Gambling Commission.
It means charities will still be able to accept credit card payments for their lotteries, provided they are taken in these ways.
The proviso is that precautions are put in place to help protect people from harm.
The Gambling Commission’s existing licence conditions and codes of practice already include a specific requirement on lotteries to set an upper limit on the value of lottery tickets which may be sold to an individual, whether during a single transaction or over a period of time and irrespective of payment method, without interaction with the individual. So, lotteries will need to set a threshold of ticket sales and ensure they interact with customers before selling them a quantity of tickets over that.
According to the Gambling Commission, this interaction requires the lottery operator to identify whether the purchasing individual may be at risk of, or experiencing, gambling-related harm. The operator also needs to keep a record of these interactions available for inspection, and the Commission can monitor the performance of lotteries through routine compliance assessments, or in response to specific complaints.
But is this enough? Or is there more that could be done to safeguard good cause lottery players?
Is it ethical for charities to continue using credit cards for lotteries?
One question raised is whether it is in fact ethical for not-for-profit organisations to continue using credit cards for lotteries, even with protections in place.
We put this to Ian MacQuillin, director of fundraising think tank Rogare. He believes that there is no ethical reason why they should not continue to use credit cards for cases where credit cards are legally allowed, but that good causes may wish to look at whether it is possible to set the bar higher than legally required:
“If it is considered acceptable for offline commercial lotteries to be paid for on credit cards then it has to be acceptable for charity lotteries to be paid for in the same way. But even if law and regulation do provide clear guidance, it is also a question for professional ethics whether to go beyond the law, which sets a lower benchmark and doesn’t stop you setting the bar higher.”
For anyone wanting more guidance on ethical decision-making, he points people to Rogare’s framework on this topic.
Moving to Direct Debits?
To better protect players and help mitigate the risk of debt, an alternative is to move away from using credit card payments altogether. Debit card payments for single lottery plays and Direct Debits for regular play payments are both familiar and easy payment mechanisms for the playing supporter, as well as being a lot safer when it comes to protecting against debt and fraud.
While of course it’s possible to go overdrawn and incur charges with a current account, it’s not possible to run up the high levels of debt seen with credit cards. Money is withdrawn directly from the players bank account, so if there are insufficient funds in their account, the payment for the lottery play is simply not taken. And if your charity currently operates a lottery where a lump sum is taken from credit cards for a series of lottery plays, you can do the same from debit cards.
Additionally, Direct Debit is the safest payment method for making recurring payments thanks to the Direct Debit Guarantee, Charities are protected by the efficiency and security of the scheme, while for the player, the Guarantee protects the account owner from payments that may be made in error or indeed fraudulently against their account.
As with any activity, risks must always be assessed. Given their low frequency format and the typical prize thresholds, charity lotteries are less likely to attract addictive gambling behaviour. But it is wise to proactively carrying out a risk assessment to help both identify any potential problem areas and find solutions.
Whether charities should be accepting credit card payments for lotteries is an interesting area of debate, and as with all ethical issues, there is no simple right or wrong answer. While the law must of course be followed in regard to credit card payments, it’s up to each charity to determine which and how many payment methods it will accept instead. Making Debit card and Direct Debit payments your methods of choice goes a long way to ensuring that all possible steps are taken to safeguard the wellbeing of everyone involved.
Jackie Lawrence, Head of Marketing, Rapidata (an Access Company)