Following on from our blog on 26 July on Andrew Rhodes’ blog post on operators restricting customers’ withdrawals, we are focusing in this piece on the role of operators’ Ts&Cs in respect of such withdrawals.

The overriding message from the Commission is that operators must comply with consumer protection laws and treat customers in a fair, open and transparent way – including through their Ts&Cs. There is nothing objectionable with that sentiment, and few would argue against it.

There are nonetheless areas of this recent Commission blog which merit attention.

Operators should not include terms within their Ts&Cs that given them ‘undue discretion’ as to when and how those terms are applied as such terms ‘could’ be unfair. This is (the Commission says) to provide the consumer with certainty in situations where that consumer is entitled to know what action the operator will take. But it is somewhat irksome to those drafting the terms, for whom certainty would be saying ‘we may do X, or we may do Y’ (depending on the circumstances), when (i) this reflects the reality (and is, therefore, more accurate); and (ii) does not involve the exercise of undue discretion. But taking the absolutist stance advocated by the Commission leaves little contractual flexibility, even where that flexibility would, ironically, lead to greater accuracy. Further, in our experience, despite this being expressed in the conditional (operators ‘should’ avoid those terms), in reality (and to the exasperation of many lawyers) the Commission has a strong aversion to operators ‘reserving their rights’ or preserving any flexibility within the drafting of their Ts&Cs. This language should therefore be avoided as much as possible (though avoiding it often results in – arguably pointless – semantic gymnastics).

However, there are areas where some operators could improve their Ts&Cs to reflect both the Commission’s latest comments and their regulatory obligations. For example, condition 17.1.1 of the LCCP requires that, before depositing, a customer should be informed of the types of verification documents s/he may be asked to provide along with the circumstances where such documents (or additional documents) may be requested. Where this is absent, it leads to confusion and frustration (and, inevitably, complaints) when a customer is subsequently asked to e.g. send a selfie holding their passport – despite this being a legitimate request from the operator.

There is also the offence of ‘tipping-off’ to consider. Operators could plump for total transparency, and at clause 11 say that withdrawals be prevented ‘if we have reason to believe you have been depositing cash from your side hustle as a drugs overlord, rather than from your advertised job as an office manager’ rather than the vague (and Commission-criticised) ‘in accordance with our regulatory obligations’. However, when that customer is berating customer service representatives about the reason they are prevented from accessing their funds, and that representative says ‘this is pursuant to clause 11’, that would likely be tipping-off (unlike where the non-specific drafting is used). So the clauses that enable operators to withhold funds in precisely these situations must be drafted with sufficient latitude to protect the operators’ representatives in that scenario. Mr Rhodes has said that notifying customers of the reasons why their deposit is withheld will not be needed where such suspicions are the basis for withholding; but does not provide any practical suggestions as to how operators best achieve the balance.

Fundamentally though, what is the harm to operators of drafting their Ts&Cs in absolute terms? If the wording says ‘we will withhold your deposit if X or Y occurs’, then (i) the Commission is happy and (ii) in the event that X or Y occurs and the operator instead releases the funds without delay, it would take a very odd sort of customer to complain about this (or indeed, even realise there had been a disconnect between the terms and the reality).

Accordingly, our takeaways from this latest post (which mirror the advice we continue to give operators is):

• Make sure your Ts&Cs are very clearly drafted (and see our blog on the BetFred dispute for further analysis of this point).
• Do not draft your Ts&Cs in a way that is ‘unfair’ pursuant to the Consumer Rights Act.
• Avoid any conditionality to the extent reasonably possible (operators should not ‘reserve’ their rights or state they ‘may’ take a course of action).
• Ensure your practices and procedures follow your Ts&Cs.
• Review your Ts&Cs to ensure they allow the lawful withholding of deposits in the limited circumstances where this is required or permitted by law/regulation.
• Consider commissioning a regular ‘health check’ of your Ts&Cs to make sure they remain up to date (we are happy to help with this).