Vulnerable unemployed son able to get credit card!

WillPS

grumbler said:

adamp87 said:

grumbler said:

Well, is £3000 the credit limit? If so, there is no point in paying anything back to Virgin.  He will have a default in his credit history - good for him.

It would be good if Virgin learned the lesson after loosing £3K, but this is unlikely to happen.

If the person is in control of their finances and has been less than truthful with their income/outgoings I don’t see how Virgin are to blame here?

That's what KYC exists for and that's why companies often ask for proofs if they can't verify the information by other means.

IME KYC checks are more often identity oriented than salary checking - Amex did ask me for my salary but it was just numbers in a box.

I know there are occasions when customers have been asked to send in payslips but they're relatively rare, compared to simple identity checks anyway.

DullGreyGuy

KYC stems from anti-money laundering and such not affordability of credit.

Banks use systems like National Hunter to identify application fraud but its all about consistency of answers so you may inflate your salary on application 1 but as there is no overdraft being requested etc they decide not to investigate further. Next you apply for a small loan using the same inflated answers and it all appears to check out. 

Obviously a highly simplified example and I'm sure the tools are much more sophisticated but UK banking/lending isn't setup or priced to be such that every single application is reviewed manually and you have to provide evidence of employment, income etc. 

grumbler

Well, if it's a new customer with the only credit history showing that he  'has regularly been overdrawn', lending him £3K without any checks is reckless to say the least. My starting limit with Aqua, that I applied  only for cashback on commission-free foreign spending was about £300 IIRC - when I had a lot of history and  other cards with 4-digit limits.

For the income there are some agencies collecting information and spotting inconsistencies. If there is no information available, then some proofs have to be requested, be it KYC or whatever. As simple as that.

MEM62

Frailpigeon said:

Thank you all for your replies.  It’s difficult to communicate with my son at the moment as he is quite unwell.   I was not aware he’d applied for a card until he forwarded the email from Virgin stating he owed £3033 on his first month’s statement.  I haven’t seen the actual credit card statement so don’t know what the limit is but he did tell me he can’t use the card any more as he’s up to his limit.  I don’t know what information he gave on his application.  I’m appointee for his benefits and I transfer money to him daily and pay off his overdraft from his benefits.  It’s very stressful because he always wants more money than I’m willing to transfer.  I’ve researched other options regarding appointeeship but there’s nothing suitable.  

I cannot really see this as being Virgin's fault or responsibility.  How are they to know your son's circumstances - I am sure he would not have told them.  Perhaps a CIFAS protective registration might help prevent any further applications being successful as they would require further checks.  

grumbler

I think a protective registration is mainly against ID fraud.
As I said above, a default will help better than any protective registration for the next 6 years, will save money to the OP  and will also teach Virgin a lesson not to lend recklessly.

DullGreyGuy

grumbler said:

I think a protective registration is mainly against ID fraud.
As I said above, a default will help better than any protective registration for the next 6 years, will save money to the OP  and will also teach Virgin a lesson not to lend recklessly.

It's intended to be for that but any CIFAS member should make contact and validate the applicant is the right person. It may be possible with the right authorities to have them contact the OP rather than the son but then its asking them not to offer rather than confirming its fraud which isn't its purpose but may work.

Olinda99

you could consider not making any payments to the card - this will show up.on his credit file and make it unlikely he can successfully get more credit going forward

Altior

If the situation is this extreme, then initiating PoA seems the most appropriate scenario. Do you know if this was his only application?

His credit file would most likely look decent enough to a lender's algorithms. It's a scenario that needs human intervention, and not having coded machines determining things. 

Frailpigeon

My son is classed as having capacity, I would not agree but that is the decision of his mental health team.  I believe he only made this one application.  

So would you agree that the best way forward is for him not to make any payments to the card so that he can’t get any more credit?

theoretica

Virgin Money gave him the card, and the usual consequences of making poor lending decisions are that they don't get paid back.  However, is his usual bank account linked so they could take money without his agreement?