Bank lends $13k to gambler—was the bank reckless or the borrower irresponsible?

Australia's biggest bank is once again in hot water for lending money to someone whose spending patterns screamed 'gambling problem.'

But this isn't just another isolated incident—it's part of a concerning pattern that raises serious questions about whether our major banks are truly protecting vulnerable customers or simply chasing profits.

The latest case involves a man who spent 57 per cent of his income gambling with bookmakers, yet Commonwealth Bank still approved him for not one, but two personal loans totalling more than $13,000. His story, now before the Australian Financial Complaints Authority (AFCA), shines a spotlight on an issue that affects hundreds of thousands of Australian families.

A Gambling Problem in Plain Sight

The unnamed customer's bank statements told a clear story. In the 90 days leading up to his September 2024 loan application, he had spent $8,251 on bookmakers—mainly horse racing—while earning just $14,510. That's more than half his take-home pay disappearing into gambling.

Most people would see this as a red flag the size of the Melbourne Cup. But CBA's automated systems gave it the green light, approving a $6,812 personal loan. When the man applied for a second loan worth $6,727 in March to consolidate his debts, the bank said yes again.

'My gambling was out of control and if you looked at my transactions it was obvious,' the man told the ABC. 'Instead of stopping to ask if I was OK, they approved not one but two loans.'

The $10,000 Loophole

Here's where it gets particularly troubling. CBA's internal policy only declines credit for people who have spent more than $10,000 on gambling in the 90 days before their application.

Since this customer 'only' spent $8,251, he fell just under the threshold.

Think about that for a moment. A person spending over half their income on gambling is somehow considered an acceptable lending risk because they didn't quite hit an arbitrary $10,000 limit. For someone earning minimum wage, that threshold would represent nearly their entire income for three months.

Martin Thomas, chief executive of the Alliance for Gambling Reform, called the bank's approach 'extraordinary,' noting that it failed to take into account the varying incomes and financial circumstances of customers.

A Pattern of Poor Judgement

This isn't CBA's first rodeo with problem gamblers. In 2020, the Federal Court ordered CBA to pay a penalty of $150,000 for contraventions of the responsible lending provisions under the National Consumer Credit Protection Act.

That case involved David Harris, who had specifically told the bank he was a problem gambler and didn't want his credit limit increased until he got his gambling under control.

What did CBA do? They increased Mr Harris' credit limit from $27,100 to $35,100 just three months after he notified a staff member about his gambling problem.

'I tried to reach out for help and I couldn't get any, I got the opposite, I got credit limit increases sent through and I tried to tell them I had a problem,' Mr Harris said during the hearing.

The current case's family representative said it showed CBA had learned nothing from that earlier matter. 'They're back to their old tricks,' he said. 'They need to do more to protect vulnerable people.'

The Scope of Australia's Gambling Problem

To understand why this matters so much, you need to grasp the scale of gambling in Australia. Recent data shows that three in four Australians aged 18 and over had gambled in the past year as of 2022, with almost half (46%) of those who gambled classified as being at some risk of gambling harm.

The average Australian adult loses about $1,527 to gambling every year—money that could be going towards mortgage repayments, retirement savings, or helping the grandkids with their education.

While younger demographics are often in the spotlight for online sports betting, gambling problems affect Australians across all age groups. For many seniors, the local RSL or club pokies can become a dangerous trap, especially during periods of social isolation or financial stress.

New Protections, But Are They Enough?

The banking industry and government have introduced some new protections in recent years. From 11 June 2024, interactive gambling providers are prohibited from accepting payments using a credit card, payments linked to a credit card (including digital wallets) or payments using digital currency.

CBA and other major banks now offer gambling blocks that customers can activate on their cards. However, these rely on customers recognising they have a problem and taking action—something that may not happen until significant damage is already done.

The current case highlights a more fundamental issue: banks have access to detailed spending data that could identify problem gambling patterns, but they're not using it proactively to protect customers.

Your Rights When Banks Get It Wrong

If you believe a bank has acted irresponsibly in lending to you or a family member, you have options. The Australian Financial Complaints Authority (AFCA) provides free, independent dispute resolution for financial complaints.

AFCA received more than 100,000 financial complaints in 2024-25, showing that many Australians are willing to challenge financial institutions when things go wrong.

The process is straightforward:

The Human Cost Behind the Numbers

Beyond the policy debates and statistics, there's a human story here. The man at the centre of this case described the impact: 'The stress was constant. I wasn't sleeping.' He's since begun treatment for his gambling addiction, but the financial damage from the loans remains.

His family is seeking $25,000 in compensation to cover the debt, interest, and harm caused. CBA has offered just $2,603—a figure that seems almost insulting given their admission that they identified his gambling spending when he applied for the first loan.

This highlights a broader question about corporate responsibility. Should banks that profit from customers' financial distress bear more responsibility when their lending decisions make problems worse?

Warning Signs Banks Should Watch For

Financial institutions have sophisticated systems that can track spending patterns across thousands of transactions. Here are some red flags that should trigger additional scrutiny before approving loans:

Support When You Need It

If you or someone you know is struggling with gambling, help is available:

What This Means for Bank Customers

The Commonwealth Bank case raises important questions for all banking customers:

The Road Ahead

As this case works its way through AFCA's processes, it serves as a reminder that Australia's major banks still have work to do in protecting vulnerable customers. While new regulations around credit card gambling have tightened some loopholes, the fundamental issue remains: banks have the data to identify problem gambling patterns but aren't consistently using it to prevent harm.

The Australian Securities and Investments Commission is reportedly looking into this matter, which could lead to further regulatory changes. For now, it's up to customers and their families to stay vigilant and use the complaint mechanisms available when banks fail in their duty of care.

The man's case is still being resolved, but his situation has already highlighted a system that prioritises profit over protection. As he put it: 'Banks need to act on the warning signs they can see in their own systems, because when they ignore them, people like me pay the price.'

What are your thoughts on banks' responsibility to protect customers from their own spending habits?

Have you or someone you know had similar experiences with lending decisions that seemed to ignore obvious warning signs? Share your experiences and views in the comments below.