Families Left in Debt After Bank Gives Cards to Minors

By Irina Titova

The St. Petersburg Times

Published: July 25, 2012 (Issue # 1719)

The city’s consumer rights service, Rospotrebnadzor, has warned St. Petersburg parents about local banking market violations in which children have been given bankcards without the knowledge of their parents.

Over the last three months, the service has received seven complaints from local parents with claims against Svyaznoi Bank, Rospotrebnadzor wrote on its website.

The parents said that the bank had allowed their children to obtain bankcards in the children’s names. The parents, however, were not informed. As a result of the children being given bankcards, the families found themselves in large amounts of debt.

The customers found out about the money they allegedly owe only in February, when they received notifications from the bank concerning their debt. The bank demanded they return the money.

The families later found out that their children had been asked to apply for bankcards by other people, who then paid the minors for the cards.

They also learned that unidentified people had withdrawn more than two million rubles ($61,700) using the cards. The St. Petersburg and Leningrad Oblast police department has been notified of the fraud. Rospotrebnadzor also found that the bank had violated the young customers’ rights by issuing the bankcards.

According to the Russian Civil Code, underage citizens between the ages of 14 and 18 years old have limited legal rights and are not authorized to sign an official contract without written permission from their parents.

“Therefore signing a contract to get a bankcard that implies an opportunity for further credit relations should not be done without written permission from the parents,” Rospotrebnadzor said.

Following an investigation, Svyaznoi Bank has been issued with four fines totaling 40,000 rubles ($1,230).

Investigations into three more incidents are currently being conducted.

Svyaznoi Bank said that the children were given debit cards — not credit cards — which can be issued without parental permission. The criminals took advantage of a technical overdraft of the cards by depositing money on the bankcard remotely and, as soon as the money was available on the card but had not yet been deposited in the bank account, they withdrew the money from ATMs. After that they canceled the deposit transaction, Anton Goltsman, a bank representative, was cited as saying by Vedomosti daily.

Rospotrebnadzor estimated the amount owed at two million rubles ($61,700); the bank itself said it was 20 million rubles ($617,000).

The bank has refused to pay back the families whose children received and used the debit cards, but has raised the age limit for people obtaining debit cards up to 18 years old. It also decreased the limit on possible technical overdrafts. The bank conducted its own investigation within the company but did not find any misconduct on the part of the employees who issued the cards, Interfax reported.

The bank’s card service software does not differentiate between adult and underage cardholders, Interfax reported.

Rospotrebnadzor asked parents to warn their children about the potential danger of signing bank contracts and explain the consequences of giving bankcards to strangers.