As a 15 year old uses his brand new debit card to order cigarettes, alcohol, pornography and Viagra over the internet we ask whether children are responsible enough to have this kind of financial freedom.
While most of society are struggling to meet ends meet, one group are learning how to splash the cash like never before. These are the underagers, those under 19 who, thanks to Lloyds TSB, now have the freedom to spend their ‘hard earned cash’ (or should that be their parents?) wherever and whenever they please.
Over the past month Lloyds TSB have upgraded their ‘Under 19s’ accounts so that children as young as 11 can now have a Visa Debit card. This effectively gives them licence to spend however much they have in their account on whatever they like either in the shops or over the internet without having to consult their parents. As you can imagine this is a freedom that has the potential to be abused by the more ‘savvy’ teenager.
Rather predictably one 15 year old from South Wales has already gone on a decadent online spending spree. Using his new Visa debit card he ordered cigarettes, alcohol, porn and Viagra over the net; much to the surprise of his parents (who have asked to remain nameless). They only became aware that their son even had a new debit card when they were asked to pay customs duty on his foreign purchases.
While you may expect that Lloyds TSB would need parental consent to make such an upgrade, this is not the case. Instead of informing parents directly that their children would soon be able to empty their accounts on the latest ‘must haves’ without their knowledge, Lloyds TSB wrote to the children.
In their defence they do explain in the letter that under 16s should check whether their parents are happy with them having access to a debit card and include a 'parental guide'. However, this of course does rely on the children showing the letter to their parents.
Speaking to The Guardian about his son’s spend up the father said: "They [Lloyds TSB] admitted they had received several calls from parents, but it was not their policy to inform the parents or guardians as they would expect the children to do so, or for the parents to open mail addressed to their children. They also do not feel that asking the parent or guardian for consent is necessary."
"I pointed out to them that by enabling children to purchase goods illegally over the internet, they were aiding and abetting a crime. Their response was that it was not down to them to monitor other people's children, and that teenagers who were brought up well would not abuse this facility."
The decision by Lloyds TSB to offer their children’s accounts with a debit card obviously raises a few issues.
Firstly, should children have a debit card in the first place? On one hand this introduction to ‘adult finance’ at an early age could provide a valuable learning experience that helps kids learn to budget and manage their money in a way that will set them in good stead for later life. However, on the other hand it could indoctrinate children into the ‘affluenza’ spending culture that simply teaches them they can have what they want when the want it; not a great way to prepare them for the world of credit they'll soon enter.
Secondly, comes the issue of responsibility; are parents to blame for how their children spend with their debit card (both on and offline) or is it down to the card issuer to restrict its usage?
Admittedly Lloyds TSB do put some measures in place to prevent their Under 19s account holders from making “purchases on websites with adult content or gambling sites”. However, as is evident from the aforementioned case, these restrictions are either far too easy to get around or, just don’t apply to foreign sites.
Finally, are Lloyds TSB at fault for issuing the cards directly to the children and trusting them to show their parents, or is it down to parents to monitor their children’s mail?
Lloyds TSB maintain that they only write to the children as 'We don't always have the parents' contact details or know the family's circumstances.” However, surely a parent must have been present when the Under 19 account was opened or, at the very least a home address taken, giving them the very contact details they would need to ask for permission.
All things considered, this is a difficult one and an issue that’s potentially going to upset a lot of parents in this situation with children under 18. However, surely any potential conflict would have be avoided if Lloyds TSB had simply written to the parents directly asking for permission.
This would have then place the decision as to whether their child was responsible enough for a debit card in their hands alone. As well as helping them to feel informed and giving them the opportunity to discuss appropriate spending with their son or daughter.
In all likelihood, other banks and building societies will soon follow suit and give their younger customers the same financial freedom as Lloyds TSB. Whether they will learn valuable lessons from the forerunner however, will remain to be seen.
Source: The Guardian
