The broke generation
Ardi Kolah reports on the latest marketing move in the competitive financial services card industry to get teenagers to spend more money, as well as charge them more for the privilege.
According to The World Sponsorship Monitor published by Sports Marketing Surveys (2005); banks, credit cards and insurance companies are the world's most active group of sports sponsors.
The issue of promoting financial products, such as bank accounts and credit cards, to young people is very tightly controlled by a raft of laws and regulations, such as the Financial Services and Markets Act 2000 and the Consumer Credit Act 1974.
However, within these regulations brand owners are able to conduct advertising and sponsorship activities that appeal to young people.
MasterCard, a major sponsor of the Fifa World Cup 2006 that takes place in Germany later this year, raised the stakes in the competitive credit card industry by partnering with BlueCorner, which operates pre-payment cards for children over 13 years-old who want to shop online but are not eligible for a credit or debit cards.
Spending on the card is limited by the amount credited to the account by parents and plans are under way to promote the cards in popular youth magazines and on commercial radio stations.
"These cards have a positive part to play as they can help teenagers and adults to improve financial discipline as they manage the money placed on the card sensibly," claims Phil Davies, director of business development at MasterCard Europe.
This claim was met with derision in the media -- it costs £9.95 to open an account, 85p for each ATM withdrawal and a £4.99 cancellation fee or replacement card -- which tends to indicate that the launch of the card was motivated by generating an increase in profit rather than altruistic or ethical concerns over spiralling credit card debts.
Not surprisingly, consumer groups such as the Consumer Credit Counselling Service and the National Consumer Council condemned the launch of the Bluecorner card as "irresponsible" and raised fears that the cards will get children over the age of 13 years-old so used to spending money that is not theirs that they will go hopelessly into debt once they are old enough to apply for a credit card.
Bluecorner has also been accused of encouraging "pester power" among teenagers who will now demand a card from parents -- as well as resources to make purchases across the internet, thereby increasing the incidence of card fraud already at dangerously high levels.
Although on paper the launch appeared set to appeal to an important target group, it is likely to attract so much criticism, particularly in light of the rising tide of debt coupled with the legal restrictions being considered by the European Commission to outlaw so-called "pester power" that Bluecorner may be well-advised to withdraw the cards before the issue starts to snowball in the media.
Ardi Kolah is the author of Essential Law for Marketers (Butterworth Heinemann, £25) and is a marketing, public relations and sponsorship consultant.
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