Credit Cards, Personal Finance, Relationships, Saving Money

Preventing On-Line Money “Accidents”

As more kids get on the Internet at younger ages, I’m hearing about more and more on-line money accidents. These “accidents” occur when kids play paid online games or games that let players buy items in the game, when they download music or eBooks from shopping sites, or when they bid on items on eBay. They end up spending a ton of money on stuff that you didn’t authorize. They may not even realize how much they’ve spent, or that they’ve spent real money.

Sometimes it happens because the kid genuinely doesn’t understand what he or she is doing. Other times it’s because the kid is stealing from mom and dad. However it happens, it often gets quite expensive before it’s caught. Part of the problem is that kids often understand how computers work before they understand how money works. They are able to navigate the web sometimes as early as two years old. They understand how online games and social networks operate, often better than their parents. They are able to manage online preferences and settings so that they can do what they want. Unless the parent is super vigilant, it’s just too easy for computer savvy kids to spend money online.

I hear from parents who say that their kids think their credit cards are “magic” and “free money.” Kids that think like this have no idea what they’re really doing when they buy all those in game goodies. On some sites, the fact that you are spending real money is cleverly masked and transactions so smooth so that only adults who are paying attention would know that money is being spent. Certainly young kids don’t understand it.

So what can you do to prevent these online accidents? Here are some ideas:

Keep the computer in a public space in the home where you can watch it: Supervise children when they are on the Internet. When you can see what your kids are doing on the Internet, you can intercept problems before they become major.

Keep your credit cards locked up or out of reach: You may think your kid is as honest as they come and he may be. But leaving a credit card out in the open is a temptation and when friends are urging the kid to buy this or that, temptation is hard to resist. Kids who don’t understand how money works may also grab a credit card thinking, “This is the secret money thingie that mom uses. I’ll use it, too.” You’re better off just keeping your purse or wallet out of reach.

Enable parental controls: If you’ve had repeated problems, use your computers’ parental controls to block web surfing or get parental control software that will enable you to block specific sties or surfing activity.

Don’t link credit cards to downloading or shopping accounts: Most sites give you the option of “saving” credit card information for quicker shopping. Decline it. Having the credit card stored makes it too easy for a kid to just click and buy.

Keep your passwords secret: Don’t share your passwords with your kids. If they want to buy something, make them come to you and then you handle the transaction. Be sure to log out when you’re done and don’t save your password for the site in your browser’s cache. A saved password plus a saved credit card is like giving kids free access to
your card.

Use gift cards, if possible: Sites like iTunes will let you use gift cards for your purchases. There is no need to link a credit card to the account and when the money is gone, it’s gone. A kid can only blow so much money in a gift card funded account.

Disable all in-game/service purchase settings: Most of these online games and websites have settings that govern how items are purchased online. Visit each game or site your kid plays on and disable all purchase settings. Look carefully at the device your kid is using, too. Many cell phones have their own purchase settings that you need to override, as do various services like iTunes.

If you’ve already lost some money because your kids bought things online that they shouldn’t have, you can try to recoup some of it. Call the company or provider and explain to them that your minor child made unauthorized purchases. Some companies will refund all or part of your money since minors are not supposed to conduct online transactions. However, their generosity (if you get any) is generally only good once. After that, it’s on you to stop your kids from buying things they shouldn’t. You can also simply return unwanted merchandise, although you may have to pay restocking fees.

If your problem is a kid who doesn’t understand money and how it is earned and spent, it’s time for some lessons. Use the online accidents as a teaching tool and then enhance your supervision so it doesn’t happen again. If your problem is a dishonest kid who, for whatever reason, knows full well that what he’s doing is wrong, then you have other problems that need to be addressed and you’ll probably have to put in stricter controls and punishments. However these “accidents” are occurring, parents need to familiarize themselves with their computers and control settings and supervise their child’s use of the Internet. If you don’t understand computers, get someone to teach you. Kids today are computer savvy, so you have to be savvier.

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