This year for the Grand National rather than making a trip to the local bookmakers I decided to place a bet online, something with the exception of online bingo I have never done before. Quite regularly we review online bingo sites and we use a company account to make any deposits so maybe I was somewhat naïve to some of the practices that credit card companies have in relation to online gaming. Having been ripped off by my credit card company I was disappointed given the debt and problem gambling issues in the UK this has not been addressed.

I set up an account with William Hill and tried to deposit funds through the use of my PayPal account. Unfortunately when confirming the transaction PayPal refused to transfer the funds due to the location of William Hill. Without a second thought I entered my credit card details under the impression that as I intended to pay the balance back straight away and that it was a 0% on purchases for 12 months that there would be no charges. As an added benefit I picked the horses that came 2nd and 3rd and won double what I had staked which I immediately asked to be paid back to my credit card and this was paid back a few days later.

How shocked was I then to get my statement through this week to find I had been charged interest on the amount at a rate of 1.873% (roughly 23% per annum). The statement also stated that I would pay interest on this amount next month, even though double the amount was refunded back to the card by William Hill within 2 days of the transaction. Having spoken to Tesco Credit and demanded it be refunded they implied that I had been sent a copy of the terms and conditions and that it counted as a cash advance. They also stated that it was on the back of the statement and that it was common practice amongst of credit card companies to take advantage of customers using their cards for online gaming by charging them additional interest asa cash advance. I looked at the statement to find there was no mention on the back of the credit card statement. The representative stated “well it is in the terms and conditions booklet.” A supervisor later again having looked at a Natwest statement stated that it was on the reverse of the statement which it isn’t and they later backed down on this statement implying they had looked at a ‘rival’ companies statements. Clearly they didn’t no what day of the week it was alone what was communicated to customers.

It begs a number of questions

a) How can credit card companies justify significant extra charges for using a credit card for an online deposit which unlike purchases where you have an interest free period they cannot avoid interest charges?

b) I can understand credit card companies charging extra interest for cash withdrawals on credit cards or balance transfers (where they make no income) but how can they justify taking advantage of customers using their accounts for online deposits when they are already charging the online gaming operator roughly 3% anyhow?

c) Why does the credit card company intend to charge interest on the account for the foreseeable future when the double the amount was refunded to the account within 2 days?

d) Why do credit card companies not notify customers that these charges apply to online gaming on the back of the statement, given that everything else is clearly indicated? (some credit card companies do notify customers)

Clearly if this is common practice then ALL credit card companies should clearly identify this on the back of the statements. Furthermore when you go to make a deposit at an online gaming site with a credit card it should clearly identify before you make the deposit that you are going to be charged a significant amount of interest for making a deposit in this way. Just because the gaming operator does not make the charge it is still a charge to take part if you are using a credit card. It is still a cost to the player to take part.

We have a big problem in the UK with problem gamblers and with such immoral practices going on it is no surprise. What is further disappointing is that the UK Gambling Commission and the Financial Services Authority which are there to protect individuals have clearly ignored this issue to date.

Maybe if it is common practice for credit card companies to be applying such penalties for customers using their credit cards for online gaming maybe this money should be used help combat debt and gambling related problems.

While Tesco is backing down in my case and they now have to deal with the complaint I should imagine millions of people in the UK are being ripped off by credit card companies when they unknowingly enter there details to play online.