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
Compare Credit Cards via money.co.uk
Comments (10)
Any opinions expressed below are solely those held by individual users and are not in any way endorsed by, or representative of those held by Money.co.uk. We accept no responsibility or liability for the accuracy or content of any material submitted and maintain the right to publish, remove or edit it as we see fit.
James M
15th Jul 2008 19:03
I am sure your parents taught you to count change at an early age.
Being competent with money is a sill we teach our children.
Now money is plastic, and we have to teach them that skill too.
Your fear mongering about children being able to buy cigs and Viagra is amusing. If you want to buy drugs, the best place to purchase them without finding your dealer is an undercover cop is IN SCHOOL. There is no school over primary, where drugs are not available.
You are worried that children can "purchase goods illegally over the internet". They always have been able to, that's why god invented postal money orders.
You have to guide children by teaching them to make good choices, not just attempt to insulate them from the world.
I agree with you that parents should be involved. Parents consent should be obtained and they should get online access to statements. That part of your argument is good, but don't start with the fear mongering, keep it real.
Arr Johnson
16th Jul 2008 00:24
This is nothing new. This very vulnerability has existed since I was a teenager and I did the same exact thing. I was also 15 when I first realized I could use the brandey-new VISA/ATM cards (14 years ago) to order booze online. It worked then, and it still works now apparently.
If people are JUST realizing this now, then guess what. You fail.
Martin Smith
16th Jul 2008 00:29
It seems a bit rich to blame the bank for their customers' spending habits.
Anonymous
16th Jul 2008 01:51
Why would a 15 year old buy viagra?
I have been doing this since visa came out with a debit gift card.
:)
nothing new...
Scotsboy
16th Jul 2008 03:19
I think that the 'fearmongering' is acceptable. You say about getting drugs etc. in the play ground. This is so true and also so is your argument about teaching children about the plastic world in which we live.
I think that Lloyds have been really irresponsible in sending cards to under 18's. The debit card will go over and this then induces fines and charges. You are not able to obtain credit until 18...so are the banks going to waive all their fee's. In regards to online ordering , who is going to pay such duty fee's, the bank? The child has no line of credit, the parents have not been informed but will be expected to pay under their guardianship responsibility. Also Lloyds have reversed the rules, it is now upto the child to decide to tell the parent or not when they recieve this new card- seriously this just gives kids more power to go over the parental head. The card should only be made to for use in the UK at shops and ATMS so ID on site can be performed.
David Lawson
16th Jul 2008 05:35
This is insane. There is no justification anyone can come up with that justifys such crass and idiotic revenue generation. It beggars belief that a National Bank can act so irresponsibly towards our children. Then they compund it by offering it direct - how dare they, hands off our children. The furore this will cause will not be minor, will not go away, and TSB will live to regret this. Any Political Party not standing up to stop this lunacy is going to be taken down so fast at the Ballot Box they will not have time to even blink. The Non-Executive Directors better start taking cover as well, its their job to stop Boards of Directors making such juvenile decisions.
McMillan
16th Jul 2008 12:36
Despite the meltdown in Zimbabwe where i grew up, i have concluded already that children are better controlled, better taken care of and even loved there than in the developed world. It is not good to be poor but when riches spoil children like this, one would wish they brought up their kids in a world of not so much plenty of money, plenty of freedom and only little parental control. The western society thinks that it's love when children are given all the freedom they want, yet to the contrary, it only destroys the kids. That bank should think twice.
Julie c
23rd Aug 2008 07:07
My 11 year old son has this account and this card, I look after the card. He earns his pocket money and when he saves up, he uses the card to purchase what he has saved for.. Its hard enough teach kids the value of money. All kids are different we are going to get savers and spenders, dont tar everyone with the same brush,
I have read these comments with a degree of amusement. Firstly it is essential that everyone learns responsible use of debit cards. It should be part of the school lessons. Lloyds TSB has issued Visa debit cards for over 16s for years before extending this. Children are not permitted to agree an overdraft, and if they do create an overdraft (and could do this with a cashpoint card or direct debit in the past anyway) there are no charges made. Parents should monitor their childrens actions online, and there is software that permits this. Wake up to the real world!
