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I have just found out my grandson has a payday loan with purple payday. (I know he is my flesh and blood, but what a muppet!)


He was temping at the time, and of course is now unemployed, so they have been hounding him for repayments which he cannot make.


He is only 17. Is it illegal to give a loan to someone this age? If so, does anyone know how we can get the loan cancelled?

Gracias a la vida - Thanks to life

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This is taken from adviceguide.co.uk


Banking, credit and borrowing money


There is no legal age limit at which you can open a bank account but a bank manager can decide whether to allow a child or young person to open an account. There are restrictions on opening certain kinds of account, for example, as a young person you are not normally legally responsible for your debts so you are unlikely to be granted an overdraft.

If you are under 18, it is a criminal offence for anyone to send you material inviting you to borrow money or obtain goods or services on credit or hire purchase. However, if you are over 14 but under 18, you can enter into a credit or hire purchase agreement if an adult acts as your guarantor.

For information on guarantors and other credit issues, see Credit.

You can borrow money at any age, but access to loans may be limited because a lender will not usually be able to take a young person to court if they break the terms of a loan. This is because you cannot usually be legally held to a contract you make when you are under 18.

If you apply for a credit card when you are under 18, you will have your application turned down.


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Any advice/comments I give are based solely on personal experience, if in doubt please consult an expert.

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in principle contract made by miners are not enforceable by the adult against the minor -- although the minor may seek to enforce them against the adult.


Minors' Contracts for money lent -- or to be lent are void.


The lender may be able to Sue in order to recover any money which was spent on items necessary the living. This would be very difficult for a lender to do.


I would suggest that you send the lender a formal letter by special delivery informing them that as they have lent money to a minor the loan is void and that no more payments will be made.


Inform them also that if they continue to make any contact in whatever form in respect of this loan that the matter will be brought to the attention of the Office of Fair Trading and also trading standards and that you will complain under CPUT.


How did the loan come about? If it is the result of some unsolicited approach either in the mail or on the telephone then you should make the complaints anyway.


Finally keep an eye open on the credit file. The lender may already have put a negative entry there -- and if they have not done so then they are very likely to do it when they receive your letter.


If you see any negative entry in respect of this matter then you should complain immediately to the Credit Reference Agency and once again also to the OFT and to trading standards. If there is any resistance from the Credit Reference Agency to removing any negative entries then you should begin an immediate legal action to have the data removed. Both the lender and the CRA may try to tell you that your grandson consented to the sharing of data as part of the loan agreement. However because the loan agreement is void, any consent is also void.


These lenders need this kind of rough treatment in order to stop them preying on young people -- so if you are tempted to feel bad about this, don't.

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Thank you so much for all your advice. I don't know how he managed to get the loan. Purple Payday's website states you must be 18, so I can only assume he lied on his application!


Hopefully, he has learnt a good lesson. Am busy drafting the letter now, and will post an update when we hear.


Once again, I appreciate the advice. Many thanks.

Gracias a la vida - Thanks to life

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If he lied on the application then it is unlikley that he will be able to rely on his minority to avoid the agreement.

I would suggest that you get a copy of the agreement.


I suggest at this point, a friendly letter asking for a copy of the agreement.


If it turns out that he lied then you will have to deal with it.

If on the other hand, he didn't then take the action whcih I suggested in my earlier post

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