Changes to the LCCP from 31 October

Changes to the LCCP from 31 October

by Melanie Ellis, Senior Associate

As you may be aware, changes to the Gambling Commission’s Licence Conditions and Codes of Practice (LCCP) will come into force on 31 October 2018. For the most part, these changes serve to codify things licensees should be doing anyway, but this is a good opportunity to check your business is compliant.

The key changes that you need to be aware of and begin preparing for are as follows:

Fair and transparent terms and practices

Licence condition 7.1.1 has been amended, following the undertakings given to the Competition and Markets Authority (CMA) earlier this year. Amendments to the wording bring consumer notices within the scope of this condition and the following section has been added:

“Licensees must ensure that they do not commit any unfair commercial practices within the meaning of the Consumer Protection from Unfair Trading Regulations 2008, at any stage of their interactions with consumers.”

It should be noted that the requirements of the undertakings have not been transcribed into the LCCP, but the expectation is that, as the undertakings clarify the requirements of consumer protection legislation, licensees will comply with them.

Advertising codes

Adherence to the CAP and BCAP advertising codes will become a social responsibility code provision (SRCP) rather than ordinary code provision (OCP). The difference is that, as a SRCP, this has the force of a licence condition. Failure to comply can lead directly to a licence review. We anticipate that you already aim to advertise in compliance with these codes, but with the greater potential for penalties for non-compliance, this may be a good time to review your advertising materials and approval procedures. Compliance with the Industry Code will remain an OCP.

Significant conditions

The SRCP regarding bringing significant conditions to customers’ attention has been reworded in light of the action by the CMA. Under the amended provision, these must be provided at the point of sale and on all advertising. The GC clarified in its consultation on these changes that “significant conditions” means “those which are likely to affect a consumer’s understanding of a promotion and which might affect whether they take advantage of it”.

Consent for marketing

It will be a new SRCP that customers are not contacted with direct marketing without their informed and specific consent. Again, you are likely to already be obtaining customer consent to receive marketing materials following the implementation of GDPR earlier this year, but this is a good time to review your processes to ensure full compliance.

Responsibility for third parties

The SRCP regarding a licensee’s responsibility for third parties (e.g. affiliates) has been re-worded so that licensees “are responsible” for the actions of third parties rather than “must take responsibility”. This is a subtle change but does strengthen the condition, making it clear that licensees will be held responsible for non-compliant marketing by affiliates, even if unauthorised.

Complaints and disputes

The SRCP dealing with complaints and disputes has been amended so that complaints must be dealt with in a “timely, fair, open and transparent manner” and that customers may refer disputes to the ADR provider if not dealt with to their satisfaction within eight weeks. Following consultation, the Commission has added a proviso that they may be referred within eight weeks only if the customer has co-operated with the complaints process in a timely manner.

The amended wording also serves to prevent licensees from using terms which restrict the customer’s right to bring proceedings in any court of competent jurisdiction. Previously this restriction only applied to the terms of use of the ADR entity, but now there is a general prohibition on any terms which have this effect. Licensees may not, therefore, include a requirement in their customer T&Cs that disputes must be dealt with by arbitration rather than in court, however they may state that the ADR provider’s resolution will be binding on both parties.

New guidance will be published by the Commission on dealing with complaints and disputes and reporting requirements.

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Bringing various consumer protection measures within SRCP strongly implies that the Commission now views consumer protection as a social responsibility issue. Although it has happened gradually, we think this does reflect a policy change at the Commission which, certainly at its formation in 2007, would have described social responsibility as a licensee’s obligation to protect young and vulnerable individuals at risk of harm from gambling addiction. These changes will of course serve to protect those vulnerable customers, for example from being led by marketing to make unwise decisions to gamble, however it is clear that they are also designed to protect the wider population from unfair or unclear marketing practices. Consumer protection is being elevated to the same level (potential licence review for non-compliance) as protection of young and vulnerable customers.