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Gambling firm 888 has been hit with a record £7.8m ($10.1m) penalty for failing to protect vulnerable customers.

Following an investigation by the UK Gambling Commission (UKGC), it emerged a technical failure meant 7,000 customers who had chosen to take "time out" were still allowed to access and use their online accounts on the bingo platform.

The majority of betting websites offer the option of self-exclusion to customers who want to voluntarily stop gambling, but in 888's case the failure lasted for 13 months and saw the affected customers deposit a combined £3.5m in their accounts.

The regulator described the shortcoming as "significant flaws" adding the self-exclusion system was not robust enough and failed to protect customers.

In one shocking example highlighted by UKGC, a customer who had stolen £55,000 from their employer to gamble managed to stake £1.3m in more than 850,000 bets between September 2014 and October 2015. He gambled for an average of 3-4 hours a day.

In this particular case, the company's "lack of interaction" with the customer meant it was unable to "recognise visible signs of problem gambling behaviour" and raised "serious concerns" about its ability to safeguard customers.

"Safeguarding consumers is not optional," said the commission's chief executive Sarah Harrison. "This penalty package of just under £8m reflects the seriousness of 888's failings to protect vulnerable customers.

"The 888 sanction package will ensure those affected don't lose out, that the operator pays the price for its failings via a sum that will go to tackling gambling-related harm, and that independent assurance will be given to see that lessons are learnt."

Some £4.25m of the penalty package will go towards charitable causes helping gambling addiction, while the remainder will be used to repay the affected customers.

In a statement, London-listed 888 said: "The company has been working cooperatively with the UKGC throughout its review and has concluded a voluntary regulatory settlement with the UKGC.

"The company accepts the conclusion of the review and is committed to providing players with a responsible as well as enjoyable gaming experience."