Teen kills himself af ter Wonga took all the cash from his bank account
A TEENAGER killed himself on the same day payday loan firm Wonga emptied his bank account.
The coroner investigating Kane Sparham-Price’s death warned that lending rules needed to be overhauled to stop others taking their lives after being left penniless.
Mr Sparham-Price, 18, had taken out several loans with Wonga for unspecified amounts.
But he fell behind on his repayments and in February 2013, on the day the lender took the last of his money, he was found hanged in his flat.
An inquest revealed Wonga had ‘cleared out’ his bank account, leaving him destitute.
They were able to do so as loan repayments are effectively made by direct debit, after the customer hands over bank details.
Last night his grandmother Margaret Price, 64, said: ‘He had only gone to them because his benefits had been stopped after he missed a doctor’s appointment, but vulnerable people like Kane should be protected.’
There is no suggestion Wonga acted unlawfully or knew Mr Sparham-Price, who had suf- fered mental health problems, had been left penniless.
Yesterday it emerged South Manchester coroner John Pollard warned the Financial Conduct Authority there was a ‘risk that future deaths would occur’ unless they took action. Mr Pollard said: ‘[Mr Sparham-Price] was left with no money in his account and no means of borrowing any more.’
He said lenders should have to leave a minimum sum in clients’ accounts to ‘avoid absolute destitution’. The FCA’s Martin Wheat- ley said that, though he understood the coroner’s ‘sentiment’, the suggestion was ‘undesirable’ as it would breach privacy.
Mr Wheatley said measures had since been put in place including controls on how often lenders can access customers’ funds.
Mr Sparham-Price, of Ashton-under-Lyne, Greater Manchester, spent much of his childhood in foster care. Before he died he had revealed on Facebook that he was excited to move into a flat and was organising a deposit. The amount he borrowed is not known.
Payday lenders were criticised by a 2013 report from the Office of Fair Trading for sky-high interest rates – some as much as 6,000 per cent APR – and one-off charges for missed payments.
In January the FCA introduced rules to clamp down on unscrupulous lenders, including a daily interest cap of 0.8 per cent and stricter affordability checks.
The inquest was held in September last year but details of it only came to light yesterday. It found that Mr Sparham-Price took his life. A spokesman for Wonga said: ‘We conducted a full review of this case at the time to confirm we acted according to regulatory guidelines.’ For confidential support, call the Samaritans on 08457 909090 or go to www.samaritans.org
‘Avoid absolute destitution’