Call for changes to payday loans after teenager commits suicide
Payday loans rules should be changed, a coroner says, after a disabled teenager killed himself on the day he was left destitute after Wonga emptied out his bank account.
Kane Sparham-Price, who was just 18 at the time and suffered from mental health problems, was found dead in February 2013 after the payday loans company took out payments due under a debt agreement between the two parties.
Wonga did not act unlawfully, or realise its actions had left Mr Sparham-Price without any money, but the event led to calls for rule changes to be made to payday loans.
The coroner, John Pollard, said in a report to the Financial Conduct Authority (FCA): “While I accept that the various payday lenders are legally entitled to ‘clear out’ someone’s bank account if money is owing to them, it struck me that there ought to be a statutory minimum amount which must be left in the account (say £10) to avoid absolute destitution.”
“As I understand you set and regulate the rules, you might look at this with a view to preventing further deaths,” he continued in the report, which was sent to the FCA 12 months ago.
In its response last October, the FCA announced that the changes suggested by Mr Pollard were “undesirable” due to the fact it could leave a customer’s privacy being breached, among other issues. However, some of the changes made to the rules in January this year help prevent such an event from happening again.
The report was recently uncovered by the Disability News Service, despite the case being heard a year ago.