At the height of this man’s gambling addiction, a bank gave him $25,000
It's been more than a year since Mitchell Spiteri placed a bet, but there was once a time when his life was ruled by gambling.
- As of February 17, laws banning gambling companies from giving credit to people will come into effect
- Banks still able to provide credit to gamblers via credit cards, overdrafts and personal loans
- Banking royal commission to examine cases of problem gamblers getting credit from banks
His problem began slowly at 18, and in two years had escalated to the point where all he could think about was his next punt.
By the time he had turned 20, Mr Spiteri said he had lost control, placing bets daily via gambling websites.
"It would be a constant struggle of fighting the urge to bet. When money came into the account it was almost like a straight away bet," Mr Spiteri said.
"It gave me a rush and it was so easy to get that rush again, and at an early age of my life it was something that was hard for me to control.
"It just grew and grew and grew."
Mr Spiteri has worked full-time since he was 16. He had a regular income and had previously repaid a $5,000 loan.
While he might appear to be a good loan candidate, his bank, National Australia Bank (NAB), had access to his personal account details.
A simple glance at his transaction history showed Mr Spiteri was betting hundreds of dollars a day with online companies Tom Waterhouse and Ladbrokes, along with casinos and pokie venues.
"I was at one of the highest points of my gambling addiction. I had no money and I got a letter in the mail and it said I could have $25,000 — this was from NAB," Mr Spiteri said.
"Being in a state of addiction and despair I obviously jumped for it. Straight away it drove my gambling into the deep end really hard, and I was already in the deep end."
Within days, NAB had transferred $25,000 into his savings account. He quickly lost it all.
"When you lose such a big amount of money like this and you go into debt, I felt like I couldn't get back from it," Mr Spiteri said.
At the point that Mr Spiteri was offered the loan by NAB, he said he felt unable to control his behaviour.
"You get these offers all the time, especially when you gamble, and the banks can see these transactions surely and they know when you are at you're most vulnerable," he said.
NAB sold on Mr Spiteri's debt to a debt collector. His father has since gone guarantor on a second personal loan, as he works to pay it off.
The bank should have done a check: financial counsellor
Mr Spiteri's financial counsellor Pauline Smith said a prudent check of his personal savings account would have shown the severity of his gambling problem.
"I think that they (the bank) were in a particularly good position to be able to see, because his personal savings account was with the bank also, so they could see what he was spending his money on every day," she said.
"Quite clearly it showed that most of his money was being spent on online gambling."
In a statement, a spokesperson for NAB declined to comment on the specific circumstances of Mr Spiteri's case for privacy reasons, but confirmed that "based on his disclosed income and expenses and credit bureau checks at the time, he was assessed as being able to afford the loan he applied for".
Mr Spiteri's story is one of several case studies being submitted to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Do banks have an ethical responsibility to vulnerable customers?
As of February 17, federal legislation banning gambling companies from giving credit to people will come into effect.
However, the laws do not extend to banks, which can still provide credit to gamblers via credit cards, overdrafts and personal loans.
In Financial Counselling Australia's (FCA) submission to the royal commission the lending practices of the bank when it comes to gamblers has been put under the microscope.
The FCA has listed several examples to the royal commission about the harm caused by the banks' lending practices, which it labels "wilful blindness".
The National Consumer Credit Protection Act stipulates credit must not be granted if the loan is not suitable.
"Under the responsible lending legislation, [the banks] have a responsibility to assess the suitability of the loan. It is a bread and butter responsibility," director of policy and campaigning Lauren Levin said.
"There is also an ethical responsibility to look after your customers, to not trip them up.
"The banks have to not lend to people who they can see will use the money for gambling. That is just not responsible."
In 2016, the Responsible Investment Association of Australasia wrote to the big four banks requesting they review their position on online gambling and credit card use.
The letter was signed by some of Australia's largest superfunds, as well as ethical investment funds.
'No restrictions in the online space'
The chief executive officer of UCA Funds Management, Michael Walsh, said as online gambling becomes increasingly popular, it has meant that greater restrictions needed to be put in place.
"We know from other forms of gambling, like going to casino or even to the newsagent to buy a lotto ticket, if you offer a credit card to pay … they will say no," he said.
Have you worked in the banking industry?
If you have information about what we can expect to hear at the royal commission you would like to share:
"So here we have restrictions that are understood on using credit to pay for gambling in the non-online space, but no restrictions in the online space."
Smaller banks including the Bank of Queensland, Citibank and the Bendigo Bank, have already banned the use of credit cards for online betting.
In statements provided to the ABC, each of the four major banks acknowledged they were taking steps to prevent vulnerable customers from falling into further financial hardship through measures including allowing customers the option to block their credit cards (with a 48-hour "cooling off" period), and creating the option to "turn off" credit card use for online transactions.
However, Mr Walsh from UCA Funds Management said that those actions did not go far enough.
"The issue with these particular controls is that they don't go to the heart of the issue, which is continuing to offer credit to allow people to gamble online as that industry grows extremely rapidly," he said.