What to do when a card is used for unauthorised gambling transactions

The UK Gambling Commission advises that blocking gambling transactions using a bank's freeze function can prevent any payment from being processed at a gambling merchant[REF]1[/REF]. Bank of Scotland, for instance, bans its customers' cards from making payments to betting sites and betting shops on request. However, a freeze is not exactly the same as an unauthorised-payments dispute, as some transactions may still get through.

Immediate Containment

Most UK banks allow customers to stop the card from purchasing gambling services in future. The Gambling Commission provides instructions for blocking gambling payments by using a bank's stop function. Bank of Scotland's gambling block, for example, will detect and block any attempted transaction through what it considers a gambling merchant. Within a day of the bank freezing the card, a cardholder cannot make new gambling payments from their account. This prevents spending going through the account at all, without having to prove that the transactions were not authorised.

However, the measure to block gambling transactions has some important gaps. Bank of Scotland's block, for example, will not prevent gambling-related transactions that are not coded as betting transactions to go through, even if the cardholder considers them to be gambling-related. It will not block syndicate bets, National Lottery payments or transactions sent directly to a gambling operator's bank account.

Similar restrictions exist with Danske Bank. While their gambling transaction limitations promise cardholders a quick solution, they cover only the rolling 30 day period - so will block new purchases in the moment but re-open the possibility after a month.

Freezing gambling transactions to prevent transactions is therefore a first but vital move, but it is not a complete solution.

Blocking Is Not the Same as Disputing

A blocked card is different from the process of dealing with a disputed or unauthorised payment. Blocking prevents the card from making payments in future, at least for the period of time the block applies. Disputing, on the other hand, is a formal and often legal process to establish that a payment that has already been made is unauthorised. The Gambling Commission's instructions, for example, are about blocking future payments, not how to make a claim. Mastercard's guidance is about handling a claim for cardholder fraud. The Gambling Commission mandates that banks put in processes and technology to “filter gambling transactions through automatic blocking where necessary, and detect any that get through.” It does not give instructions on when the bank must refund.

A gambling freeze will not prevent a payment being authorised or settled just after it is made. The Financial Ombudsman ruled in the case of DRN9250454 that HSBC was not liable to refund disputed card payments on the grounds that the card and PIN were used for the transaction, even though the customer argued the gambling was problematic. Similarly, DRN2533197 found that a freeze was not the same as a formal dispute process, and did not automatically mean a disputed charge was a fraud.

What the Bank Can Stop

Customers at different banks will have different rights and obligations, so it is important to check what the terms and conditions actually say. However, in general and as of 2026, customers who have blocked gambling payments via their bank can expect the bank to:

• Prevent the card from making gambling purchases of any kind.
• Extend the freezing functionality to in-app or online payment requests, though they may need to be blocked individually.
• Remove existing gambling merchant authorisations.

UK institutions do not, however, generally extend the freeze to:

• Remove existing gambling merchant authorisations.
• Remove gambling merchant information.
• Extend the freeze to non-gambling transactions.
• Extend the freeze to all card expenditures.

Blocking payment authorisations therefore offers a crucial tool, but reaching out to the bank is the quicker and more secure way to ensure the block is in place.

The Refund Route for Fraud

If a card is used for unauthorised gambling payments, the first step is to freeze, then report. Customer protection rules are weighted in your favour - state that the only time a bank can reject a claim for an unauthorised transaction is when the customer knew that the card information was used. This is what distinguishes a gambling transaction claim in law from a more general transaction claim. The bank must immediately refund if a claim is made. The online documentation for the Financial Ombudsman Service's dispute resolution processes shows that many cases where a dispute over unauthorised payments were upheld, and the only claim letters where this was not the case stated that the Payee reportedly knew the cardholder's details and consented to the transaction.

Reporting a disputed transaction takes time, and some banks may apply mountains of paperwork, so using the bank's own tools and instructions to make a disputed payment report is advisable. Note that some institutions will block cards when customers report them lost or stolen, and this period means any transactions are treated as fraud unless otherwise demonstrated to the card company.

Freezing after the fact therefore happens after the fact, so is second-choice to reaching out to block the payments from going through at all.

Authorisation Defined

One of the most regrettable misunderstandings is that card fraud only counts when the card is stolen. This is not true. The relevant legal test is whether the transaction was "authorised" - that is, whether you gave your consent in a lawful way.

It is an easy point to miss, but the existence of a gambling payment block means the bank's own risk management system has deemed the merchant a risk, and can legally be disputed as unauthorised unless the cardholder has expressly given consent. If the payment was not given with intent to gamble, or without the approving mortgage holder's permission, the card provider must trace the transaction back and make the restitution in full.

Stopping new transactions and reporting them needs to be done immediately, the rules prescribe. The longer the cardholder waits, the harder it is to establish that the transactions were not authorised.

The Difference for Family and Domestic Cases

The rules also apply to family members using the card. Family members who knowingly use a card for gambling are not entitled to claim the transactions are unauthorised, whether they are included on the account or not, under the relevant rules and laws that apply to both Payment Service Authorisation and operating cost sector. If the cardholder considers that a family member has made unauthorised payments, the same rules apply as for a non-family member: the cardholder should immediately report it to the bank and provide all information requested to support the claim. If fraud is suspected, the card issuer could consider the transaction unauthorised, provided that it is only prior to the time the victim noticed and the first point communicated to them.

The difference in principle is however worked out in practice when the gambling institution or online gambling site sends any of the winnings, should the payment restrictions and account blocks be overridden.

If an account has been restricted, the gambling institution or online gambling site is unlikely to return any payments, as it will see the account as having been deliberately limited. If the spouse claims they never consented to the gambling, then it will have to be settled between household members. If the gambling institution or online gambling site was aware that the payments came from an account where the other mortgage holders had blocked transactions, then the value of the deposit would also be in question, and this could delay the refund.

For most banks and account holders, the starting point will be that if the card has been blocked to prevent the payments from being made, this is a sign that consent was not given. Even within a domestic arrangement, that means the gambling institution cannot legitimately expect to keep the winnings, but will need their own claim procedures to make it so.

Protecting against online gambling fraud as a cardholder is therefore vital, and confirming the accounts restrictions are required. It takes the burden of evidence away from the account-holder because, as of, this is now a clear indication that the gambling institution has had prior knowledge that the payment was not authorised and therefore an unauthorised payment.

Conclusion

Honest mistakes can happen in domestic situations, and the home may need paying, but if the cardholder feels the card has been used for gambling transactions that should be declared as unauthorised, then speaking to the bank immediately is the first and most vital step, then if needed the next step is to contact the financial ombudsman to block it. Being vigilant in catching it early is crucial, and using a bank's own payment authorisation blocking tools should be part and parcel of organising a card where there might be a risk.