Guess what I bought today…
“Outrageous” and “shocking” have been the exclamations this weekend as it emerged Lloyds TSB has been posting visa-enabled debit cards to children as young as eleven, without informing their parents.
Previously, the cash cards offered to 11-15 year olds had been restricted to withdrawing cash from ATMs or in branch but these new cards allow spending anywhere that the Visa sign is displayed, including online shopping sites.
The Daily Mail revealed a 15 year old boy in South Wales was able to freely purchase online goods (supposedly restricted to adults) including cheap cigarettes, fake ID and Viagra. His parents only found out when they received a Customs demand for duty on the cigarettes which had been bought from an overseas website.
Obviously this is one single case and not all 11-15 year olds will be secretly buying performance drugs and cancer sticks.
The issue here is not that children shouldn’t be allowed debit cards, but the fact Lloyds TSB did not feel it was necessary to inform these children’s parents about their new spending power. They did not give parents the opportunity to supervise and educate their own children.
Defending the decision, Lloyds TSB claims the letters that were sent to their young customers, telling them they could have a debit card, “made it clear that they should let their parents know” and included parental guides in the letter. So, they told the children to tell their parents.
Is it just me or does this sound rather naïve?
A spokesperson for Lloyds TSB continues the defence with the claim “We don’t always have the parents’ contact details or know the family’s circumstances. There are cases where the child might bank with us but the parent might not”.
I’m sorry, but are we expected to believe that the bank has had no contact with these parents? That children regularly pop into banks to open accounts alone? That banks don’t require any kind of parental verification before they set up an account on the word of an eleven year old?
No, banks will invariably want to speak to the parents at the opening of the account and should have retained their contact details. If the bank can’t get authorisation from a parent before providing a child with a visa-enabled card, then they shouldn’t issue it.
Personally, I don’t think debit cards for 11-15 year olds are necessarily a terrible idea. In fact I think allowing their children to use a debit card at an early age could aid parents in teaching them about the value of money and the way that the banking system works. But crucially here the parents must be involved to supervise and guide.
It is essential that we are taught about money from an early age and of course there are several other options aside from visa-enabled debit cards.
Basically, any way that you can get your kids into the habit of saving regularly will set them up really well for their financial future. The amount they save isn’t even that important. Rather, it is planting the seed in their minds that regular saving is good and helping them to see the benefits that will help them later in life.
Opening a Child Trust Fund for your child can do exactly this, allowing your child to gain an understanding about personal finance and ensuring they have savings at the age of 18 – giving them a great financial start to their adult life both in mind and in pocket!
If you are teaching your brood about money matters, it’s definitely worth pointing them towards the FSA’s What About Money?, a fantastic new website that is directly aimed at young people and provides information and guidance on a range of money matters.
Pocket money… car boot sales… piggy banks…
How did you learn the value of money?
