CHILDREN as young as 11 are being given debit cards which allow them to buy goods such as cigarettes and Viagra over the internet, without their parents' permission.
The high street bank Lloyds TSB, which sends out the Visa cards to youngsters, last night came under fire from politicians and credit charities for placing children at risk.
The bank claims guardians can opt out of the service for their children –
but admits to sending the cards directly to their customers with a parental guidance leaflet which the youngsters should pass on.
Lib Dem Treasury spokesman Vince Cable accused the bank of trying to "seduce" customers at an early age. He said: "It is deeply dispiriting. This is clearly motivated by short-term greed.
"You would have thought banks might have learned some lessons from their irresponsible lending on credit cards and mortgages. But now they seem to be compounding the problems by adopting the grossly irresponsible policy of encouraging youngsters to spend on these debit cards."
And Chris Tapp, director of money at the education charity Credit Action, said: "It goes against common sense for banks to cut parents out of the loop … parents need to have some control over how their children are spending their money.
"Children may be swayed by advertising or other influences to make an impulse buy," he added. "Some may end up buying things that are unwise."
Under the Banking Code, which regulates the industry, banks are free to provide customers with debit cards as they see fit.
Apacs, the body which represents credit and debit card issuers, have published advice to parents and children on debit cards – but not to providers.
A spokeswoman said: "I don't think anyone is quibbling about children under 18 having a debit card, because it helps them understand how to use money.
"I don't think parents in general object to their child having access to a card to manage their money. It's about does the parent have a right to know. There is no legislation on it."
In the past, children aged 11 to 15 with Lloyds TSB current accounts were restricted to cards which could be used only in cash machines or at bank branches.
But the new cards are Visa-enabled, meaning they can be used anywhere that displays a Visa sign.
On its website, the bank openly advertises they can be used for internet purchases.
A Lloyds TSB spokeswoman said: "The debit card does not allow customers' to go overdrawn and prevents purchases on websites with adult content or gambling sites."
It was reported yesterday that a 15-year-old boy, from South Wales, had used his card to buy cheap cigarettes, Viagra and an adult ID online. His father, who was not named, claimed the bank was encouraging illegal activity.
IN QUOTES"In line with industry practice, we have started to offer customers under 16 the option to have a debit card. The debit card does not allow customers to go overdrawn and prevents purchases on websites with adult content or gambling sites."
Lloyds TSB"You have to be 16 to have a current account. The current account has a dual-function debit card. Where parental consent is given, it is possible for saving-account holders aged 13 and over to operate a dual-function debit card from their account."
Clydesdale Bank "RBS customers from the age of 11 can apply for a Solo card. Consent is collected at account opening to discuss account usage with parents up until 16."
RBS"It is only right that young adults learn how to manage their money. It is always the responsibility of customers and their families to monitor their accounts."
HBOS