UK
23/11/2013 09:14 GMT | Updated 23/01/2014 05:59 GMT

Wonga Offers Schoolboy £400 Loan With 5853% Interest

Wonga has reportedly offered a £400 loan to a 13-year-old boy, which would take him the best part of 100 years to pay off.

Dundee schoolboy Drew Dalson would have had to pay back the cash and £56 in interest after 18 days if he accepted the deal he was sent by post.

wonga

The boy told the Mirror: “I get £5 a week pocket money – but only if I’m good. It would’ve taken me nearly 100 years to pay it back.”

Wonga has removed Drew from its database and said: “We neither market nor offer loans to under-18s.”

His dad Brian, 52, told the Daily Mail: “I thought it was really unusual when Drew received a letter addressed directly to him. When I opened it I couldn’t believe Wonga were offering him so much money.

“He’s a sensible lad and wouldn’t have done anything but I’m sure there are other kids out there who would be tempted by such an easy fix, especially before Christmas. What kid wouldn’t want £400 in his back pocket?”

Although Wonga states clearly on its website that people must be over 18 to qualify for a loan, which is standard practice among payday lenders, there is evidence that children have taken out payday loans.

An analysis of 780 cases reported to the Citizens Advice consumer service between November 26 and May 13 revealed evidence of lending to under-18s. In one example, a carer contacted the charity about a payday loan granted to a child who was in the care of children’s services.

On another occasion a 16-year-old boy had been able to take out a payday loan with an online lender. Citizens Advice said the lender had not checked how old the boy was before awarding the loan; his mother, who contacted the charity, said she was unable to close the account and was worried that her son would take out further loans he wouldn’t be able to repay.

Gillian Guy, chief executive of Citizens Advice, said: “No lender should be targeting children through advertising which suggests that getting into debt is the norm. We’ve had complaints from parents and young people under 18 who have taken out a loan without realising what they are getting into.

“This exposes the lack of checks, as lenders aren’t establishing who the borrower is, if they can afford to repay or if a loan is actually suitable for them.”