A young man with no savings was able to spend £150,000 in debt using his PayPal account, The Guardian reports.
One psychiatrist reported that her client who was under treatment for gambling addiction spent a huge amount of money overnight. The young man was struggling with his habit and ended up with no savings on his account.
In that night that possibly ruined his future, he sat down to gamble and was not able to stop. How did a man who reached the limit on his credit card was able to spend five median UK salaries in just one night?
He used PayPal on casino websites to draw funds. Spending £2,000 every couple of minutes, he was able to max the sum to a whopping £150,000.
The thing is, when you use PayPal to pay for something online, the funds are not withheld at once. It takes 48 hours for the transaction to reach your debit card or a bank account linked to the platform. If you don’t have enough funds, your bank has to pay by credit.
This is exactly how this young man exploited PayPal to fund his addiction.
The incident, even though it was just a single person doing this, raised concern among the legislators and the industry leaders. With such a system, it’s hard to create a gambling environment where you can self-exclude efficiently.
If your loved one can still drive themselves deeper in debt, even if they’re undergoing treatment, they can’t make any progress.
The Guardian also was able to talk to a former problem gambler who confirmed that some people are misusing PayPal in this way to continue gambling.
PayPal representatives came up with a statement about their concerns about this incident as well as weaknesses that it brings up. The company is going to work on making the rules recognized that the service can be misused.
It’s a major fail not to include it in the first place, but try imagining it from the company’s perspective. Do you consider that some people can use your platform to drive themselves in debt when creating it?
Now it’s too late for self-regulation. While some banks have already implemented measures to see patterns of abuse and deny payments made by suspected problem gamblers, the Gambling Commission is going to investigate.
The Commission announced they are launching a review of gambling with credit. The odds are, it’s going to end up with some kind of regulatory action.
What does this mean for a South African gambler
While it may sound alarming that the Commission is going to produce even more regulation, this actually makes for a better real money gambling environment.
Problem gamblers will have fewer opportunities to make their own life worse, and banks will have fewer problems with people unable to pay their debt.
If you know someone who was about to abuse PayPal to keep on gambling, tell them it’s not a good solution for their problem. And the opportunity is going to close soon.