Kane Sparham-Price took his own life after payday loan company Wonga cleared his bank account after a debt agreement in 2013. Kane, 18, had just left local authority care when he started taking out loans from Wonga. He borrowed numerous amounts of money from the company but he was left destitute when they emptied his account.
At the time, an inquest revealed Kane had “numerous problems including those connected with his mental health” and spent much of his childhood in care homes.
Sadly, following the debt agreement, Kane was found dead at his home in Ashton-under-Lyme, Greater Manchester.
Today it came to light that a senior coroner for south Manchester, John Pollard, was so shocked at Kane’s tragic case, he wrote a report regarding Wonga’s actions and sent it to the Financial Conduct Authority last year.
“Whilst I accept that the various pay-day lenders are legally entitled to ‘clear out’ someone’s bank account if money is owing to them [through a continuous payment authority], it struck me that there ought to be a statutory minimum amount which MUST be left in an account (SAY £10) to avoid absolute destitution,” John wrote. “And as I understand you set and regulate the rules, you might look at this with a view to preventing further deaths.”
There is no suggestion or claim that Wonga knew they left Kane without any money, nor that they acted unlawfully. In a statement they said: “We were sorry to hear of the tragic death of Mr Sparham-Price.
“We take our responsibilities to our customers very seriously and we have strict lending criteria in place. We conducted a full review of this case at the time to confirm we acted according to regulatory guidelines and to continue to improve our engagement with customers.”
Payday loan companies have become prevalent in the UK and adverts on both television and radio and in the print media are plentiful. They regularly face criticism for charging extortionate interest rates and fees to their customers, many of whom are in desperate need of money.
If you’re having trouble with debt, visit National Debtline here.