Bacta: banks classifying businesses as ‘money laundering risk’ is unfair

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Bacta has told the UK government that businesses it represents are being “unfairly treated” and classified as a “money laundering risk” by the banking sector.

In some cases, members of the trade association are also “having their facilities withdrawn” by banks “often at short notice”.

Giving evidence into banking provisions to the Treasury Select Committee, Bacta CEO John White noted that banks have considered gambling, even low stake low prize activities, a “money laundering risk”, which he called “nothing short of preposterous”.

White added that banks also view gambling “a reputational risk” which “offends their corporate social responsibility policies”.

The CEO stated: “Irrespective of anyone’s moral perspective on gambling, there should be no circumstances other than illegality, for a bank not to offer banking services to any of our members.

“It is important to note that this is a highly regulated industry. All operators have to be licensed in some form by the Gambling Commission and venues must be licensed. The conditions under which operators conduct their business are set down in law or via the Gambling Commission’s Licence Conditions and Codes of Practice.

“Furthermore, Bacta members must adhere to the association’s Code of Conduct and Social Responsibility Charter which goes beyond the law and LCCP in promoting high operating standards.”

White noted that a bank’s decision to refuse services will have a major impact on a business, as it must take a significant chunk out of its coffer to find a replacement bank. 

The Bacta CEO added as well that lending facilities for businesses can’t be replicated easily and “the debt position of customers can be severely impacted” when a bank pulls its services.

He said: “It appears that a moral or political judgement is being made about a business, with little if any real transparency or opportunity to challenge a decision. Small to medium-sized businesses are simply not resourced to take on a big bank.”

During an interview earlier this month with Payment Expert, White spoke about the role of cash in society, how cashless payments have impacted the industry and if more needs to be done to accommodate those that still wish to use cash.

Bacta also recently called for government intervention to help with a “labour crisis” impacting the UK’s hospitality industry.