Gambling, Debt & Irresponsible Lending

Understanding the Issue — and What You Can Do About It

You’re not the problem. The lending was!

If you’ve found yourself trapped in a cycle of gambling and borrowing, you’re not alone. Many people with gambling problems were offered credit they couldn’t afford - often making their situation worse, not better.

Lenders are supposed to carry out proper checks before giving credit. But when gambling is involved, those checks are too often skipped or ignored - leaving borrowers with debt they were never in a position to repay.

The Financial Ombudsman Service (FOS) has made it clear: if a lender knew - or should have known - about your gambling, they may be held responsible. That means you could be entitled to a refund of interest, charges, or more.

This page explains:

  • How gambling affects affordability assessments

  • What FOS says in real complaint decisions

  • When you might be owed compensation

  • Where to get free help and support

You're not to blame for being sold unaffordable credit. The system failed you - but there’s a path forward.

How gambling affects affordability assessments

Lenders are required to check whether a borrower can afford to repay credit without falling behind on other bills, debts, or essential living costs. This is known as an affordability assessment.

But when gambling is involved, things can get complicated — and lenders often get it wrong.

🚩 Gambling is a red flag

Regular or heavy gambling seen in your bank or credit card statements should be treated as a warning sign by a responsible lender. It may indicate that someone is:

  • Relying on gambling to manage their finances

  • Frequently running out of money

  • At risk of borrowing more just to fund further gambling

If a lender ignored this and still gave you credit, they may have failed in their duty to lend responsibly.

📉 Gambling isn’t “discretionary”

Some lenders argue that gambling is a personal choice, and shouldn’t be counted as part of someone’s essential expenses. But the Financial Ombudsman (FOS) disagrees.

If someone is regularly spending a large portion of their income on gambling, especially when in financial difficulty, it’s not a choice — it’s a pattern the lender should have noticed.

🧾 The role of your statements

In many FOS cases, the key evidence is right there in the borrower’s bank statements. Signs that lenders should have picked up on include:

  • Large or frequent gambling transactions

  • Being overdrawn often or hitting credit limits

  • Borrowing more shortly after gambling losses

If this kind of activity was visible, and the lender didn’t ask further questions, the credit may be classed as irresponsible.

When lending fuels gambling

The Financial Ombudsman Service (FOS) has made it clear: lenders are responsible for checking if credit is affordable - even when a borrower has a gambling problem.

Key takeaways from past decisions:

  • Gambling doesn’t excuse lenders – A customer doesn’t have to declare their gambling for the lender to be held accountable. If bank or credit card statements showed signs of problem gambling, lenders should have seen the red flags.

  • Gambling is not ‘discretionary’ – FOS has rejected arguments that gambling shouldn’t count when assessing affordability. If someone consistently spends large amounts on gambling, it should factor into lending decisions.

  • Lenders must review full financial data – Whether it's bank statements, credit card usage, or overdraft limits, lenders should assess the full financial picture before increasing limits or approving loans.

  • Even high-income borrowers can be affected – Large salaries don’t guarantee affordability, especially when gambling leads to persistent borrowing.

  • All lenders are held to the same standard – From high-street banks to payday lenders, FOS expects proper checks. In many upheld cases, lenders failed to notice or act on clear signs of financial distress linked to gambling.

  • Repeat lending is a red flag – When a customer takes out multiple loans or relies on credit over time, further checks should be made, especially if gambling is visible.

  • Not all complaints succeed – If the credit was small, occasional, or if gambling wasn’t yet a pattern, a lender may not have had enough information to justify deeper checks.

What you could get back?

If the Financial Ombudsman Service (FOS) upholds your complaint for irresponsible lending, the standard outcome is:

  • A refund of all interest and charges

  • If you still owe a balance, the refund will first reduce that debt

  • Any remaining refund is paid to you in cash

  • You’ll still need to repay the amount originally borrowed

In most cases, your credit file will also be corrected - this includes:

  • Removing negative marks (like defaults)

  • Taking account of payments to debt collectors

  • Removing any County Court Judgments (CCJs)

It’s rare, but in some cases, FOS can ask the lender to write off the full remaining balance. This usually happens when:

  • The lender knew you had a serious gambling problem (not just from statements — but from past direct contact)

  • They still went ahead and lent irresponsibly

Example: A bank gave two large loans to someone who had previously requested a gambling block on their account. The second loan was used for gambling almost immediately. In this case, FOS told the bank to write off the debt entirely — not just refund interest, because of the harm caused and the clear warning signs that were ignored

But if you're still Gambling…

You can make an affordability complaint even if you're still gambling - especially if you owe money to a lender or a debt collector.

But here’s the truth:
If gambling is still ongoing, it’s really hard to make lasting progress. Any refund or compensation could quickly be lost again, often going straight back to the bookies - not toward rebuilding your life.

We know it’s not easy. Stopping gambling is a big step, and it often takes help and time. But giving yourself space to recover before making a claim gives you the best chance of turning things around for good.

🤝 Free Help and Support

You're not alone — and you don’t have to face this on your own. There are free, confidential services that can support you with gambling, debt, and emotional wellbeing.

🧠 Gambling Support

💸 Debt and Money Advice

💬 One Step at a Time

Stopping gambling is often the hardest part — but it’s also the most important. Once you’ve had some time away from it, these complaints can be a powerful tool to help you rebuild your finances and your peace of mind.