Swedish consumer watchdog criticises “unfair” contract terms for customers

The Konsumentverket conducted a review of 13 randomly selected Swedish-licensed operators terms and conditions earlier in May and June, to ensure that these were fair.

The 13 operators sampled were Karamba operator AG Communications, Jackpot City Casino operator Bayton, 10bet operator Blue Star Planet, ComeOn,Group, Casinoroom operator Ellmount Gaming, Genesis Global, Interwetten, Mobilautomaten operator MOA Gaming, Pixel Bet, Smarkets, Svenska Spel, Videoslots and Guts operator Zecure Gaming.

The results of the review have been sent to all licensees and to regulator Spelinspektionen. The Consumer Agency intends to follow up the review to ensure operators have improved. If they have not, it said “additional supervisory measures” may be applied.

Konsumentverket said it embarked on the examination of the contracts to determine whether they contravened Swedish contract law or general legal principles, if there was a “significant imbalance” in the terms or if they were misleading or unclear.

The consumer agency found that some operators provided overly strict identity requirements for withdrawals, which were excessive compared to the money laundering risk that necessitates identity checks.

“Such demands from gaming companies must be reasonable and directly associated with measures considered necessary to counter money laundering,” it said.

It cited one operator, which said it may request proof of “among other things, eye color, height, weight and ethnic origin”.

It added that consumers who read the terms and conditions should have a good idea of what documents would be required.

“That a number of the gaming companies in addition, at their own discretion, can decide which documentation which is to be requested from the consumer and when it is to be requested cannot be considered balanced,” it said.

The Konsumentverket also said withdrawal limits were an example of an unfair contract term. It noted that three operators sampled limited withdrawals per week absolutely, while two more required identity verification to make withdrawals of over SEK18,000 or SEK20,000.

It added that there were many other ways in which operators’ terms and conditions included provisions that limited withdrawals.

“It appears from several contract terms that the gaming companies, at their own discretion, have the right to limit one consumer from withdrawing their winnings,” it said. “It also appears that the companies reserve the right to, for example, refuse to process a withdrawal if the consumer has violated any provisions of the terms, and that they may divide sums into installments.

“Common to several of the companies’ terms is that it is not clear in which situations the company has the right to refuse withdrawals.”

While it acknowledged that it may be hard to create an exhaustive list of situations where a withdrawal may be denied, it pointed out that many checks required should be made at the time of deposit rather than withdrawal, in order to ensure that withdrawal is not disproportionately difficult.

“The Swedish Consumer Agency considers that conditions are limiting the consumer’s right to withdraw his money and where the conditions are unclear and unclearly formulated, may be considered unreasonable,” it said.

The agency also noted that four of the 13 operators’ terms suggested that foreign laws should apply to Swedish customers, with three arguing that a non-Swedish court should have jurisdiction over disputes. This, it said, violates European Union law.

“The Swedish Consumer Agency believes that this is something that should be done to make it apparent from the terms of the contract that the customer possesses a protection under Swedish law,” it said.

In addition, the Konsumentverket noted that only seven companies sampled mentioned an alternative dispute resolution body, with five listing the General Complaints Board (ARN) and two the EU Online Dispute Resolution, which is said was inadequate as operators must also provide a Swedish dispute resolution body.

Only one operator provided all the information about alternative dispute resolution that is required.

“In cases where information on alternative dispute resolution is missing or incomplete, the Swedish Consumer Agency considers that it is contrary to law and creates an imbalance between the parties, where the consumer is not informed what rights and opportunities he has in a dispute,” the agency said.

Furthermore, the Consumer Agency noted that the majority of terms and conditions included overly strict requirements around making a complaint.

“If satisfactory information is not provided, the company considers itself to be right not to proceed with the complaint, or in giving a delayed response,” it said.

It added that one operator said that “unnecessary and harmful complaints are not accepted” and that complaints should only be made once, with repeat complaints being subject to a SEK100 administrative fee. 

Finally, it mentioned that 11 operators included a disclaimer which argued the operator is not liable for a “far-reaching” variety of possible damages. It said that these terms were typically imbalanced and potentially misleading, as there was no such limit on consumer liabilities and the terms were often vague enough that they may capture situations when a consumer could expect to be protected.

“There is significant room for improvement in the audited gaming companies,” it said.