A Sydney mother believes that lenders are making it too easy for "impulsive teens" to commit to loans online.
The woman told News.com.au that her 19-year-old son, who works part-time, had been approved for a $15,000 personal loan from the Commonwealth Bank.
She told the publication her son applied impulsively, because he wanted to buy a car but had not even been working part-time for an entire year.
“This was just shocking. It’s been a bit traumatic," the woman told News.com.au.
"There’s no way a kid [in the past] would get a $15,000 loan approved without even having to enter a bank.”
In the 12 weeks before the approval he had been earning $500 a week due to overtime, but just a few months earlier that amount was a mere $150 a week, News.com.au reports.
When the mother was made aware of the loan she had reportedly tried to call to get the loan cancelled and went into the bank with her son.
They were allegedly told that they could not cancel it on the spot but instead would have to make a complaint.
“On 29 September 2017, the income was verified automatically through our system, the contract was accepted online through NetBank and the loan was funded,” the CommBank complaints officer said.
The woman's complaint was reportedly settled last month.
A Commonwealth Bank spokesperson told Yahoo7: "Commonwealth Bank lends according to individual risk profiles which take into account a number of factors including a borrowers’ ability to service that loan and their previous credit history.”
The bank said its processes are in line with industry standards and practices.
A customer who is trying to receive a loan can cancel their application prior to submitting an application, prior to accepting an offer and prior to accepting the contract.
Customers can also cancel an application over the phone before the money hits an account.
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The mother told the publication that for the younger generation “hitting a button is very simple”, but acknowledged online loan applications were okay for people who "know what they're getting into."
“I just think [there should be] a step in the process where a human rings you beforehand to explain [things like] the total interest. A lot of people don’t understand, especially a teenager. They think they’re bulletproof.”