Bank of America Reinforces Anti-Online Gaming Policy

5 August 2002

Although Bank of America recently informed cardholders that its credit cards can't be used for Internet gambling purchases, a company spokesman said nothing has changed with the bank's corporate policy.

When cardholders in Arizona got their July statements, they also found information warning them that any gambling transaction that was picked up by the bank's processors would be blocked, and that if some transactions got through, card holders will be liable for any expenses associated with them.

The company warns its users that online gambling is illegal in many jurisdictions and that just because an operator accepts a Visa or MasterCard doesn't mean that operator is running a legal business.

Despite the recent warnings, Brad Russell, a spokesman for Bank of America, said that on July 1, 2000, the company started blocking all authorizations that could be identified as Internet gambling.

Russell confirmed that the statement stuffers were sent out in July to reinforce the company's policy. He wasn't sure if the warnings were sent only to Arizona residents or if there were sent nationwide.

He did confirm, though, that the reinforcements were geared toward online gaming transactions because of their high rate of risk for the issuing bank.

"It is primarily just Internet gambling just because of all the risks that are associated with it," he said. "There is a lot of liability involved and this is an initiative to try and limit our exposure to the risks."

Fortunately for Bank of America, only a small portion of its customers were using their cards for Internet gambling activities. Russell said little was made when the company first introduced the ban two years ago and only now did the mailer get media attention because of the increased attention credit card companies and banks are giving to Internet gambling and credit card fraud.

"We found that less than 1 percent of our customers were using their Bank of America cards to gamble online," he said. "It is not precluding a lot of our customers from transacting online. This effects only a small population of our customer base but it was something that was highly risky for us as a business."

Russell did say that in the two years since his company started to block Internet gambling transactions, a small percentage still work their way through the system and get processed.

He said the biggest reason for that is because some online casinos and sports book operators fail to code the transaction properly. Bank of America's policy is to only block transactions that are properly coded.

"Those that could be identified were blocked on all of our different card products," he said.

Russell said Visa and MasterCard determine which operators aren't using the proper codes and levy appropriate fines, not Bank of America.

The company has gotten no feedback from cardholders requesting their cards be used for online gambling transactions, he said.

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