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The New York Times has an article on a virtual goods focused start-up in California that just defies description (and reason) -

A new payment option for anyone without a credit card or a debit card, no matter how young, has just become available. It’s initially offered by FooPets and Puzzle Pirates, online game companies that are business partners of Kwedit.com …

Minors as well as adults can buy items in the games with a “Kwedit Promise,” which can be paid off later in a number of ways — with a credit or debit card, for example, or with cash sent in a mailer that Kwedit supplies.

So – anyone can buy stuff with the promise of paying it off later. Doesn’t sound that different from a credit card that magically has no late fees and you never have to pay off. How very tempting.

Then you look at the audience they are targeting -

At FooPets, users “adopt” lifelike digitally animated pets and then buy virtual goods for them, including food, beds and chew toys.

The site’s core demographic is 12- to 14-year-old girls …

“Kwedit is the first payment system we’ve used that doesn’t require getting a parent involved,”

Wow! That’s exactly what we’d want to do – get 12 to 14 year olds buying virtual things and getting trapped without their parents knowing about it.

Evil in 2 ways – Addictive Games, Targeting Minors

There are two big problems -

1. Contrary to the name the companies give them i.e. nurturing games, these are simply games that get users addicted. They require regular investments of time and exploit the forager-gatherer instincts to get people totally locked in. At that point – to keep ‘progressing’ rapidly in the game you have to start using real money.  
2. Users between 12 and 14 are very, very susceptible. Do we really want kids to be using their allowance to pay for virtual goods?

Another Surprising Twist

The way Kwedit is set-up makes it even more evil.

1. You start off with free credit.  
2. If you pay it off, your credit increases.

At least with regular credit cards you don’t get one until you have some amount of credit already.

Kwedit have managed to make something even more dangerous than credit cards – and they’re targeting it at kids.

Do we really want kids to get trapped in credit systems early?

Here’s how the company tries to spin it -

Even the company says that it’s just marketing and not an enforceable contract. But Kwedit is a way to become acquainted with credit early, while still on training wheels.

Who in their right mind would want kids to start paying things for virtual goods using a virtual credit score?

Don’t know if it makes any sense to get kids stuck in a credit card and credit score system at 12 years of age. 

What do you think – Would you let your kids use Kwedit?

Very interested in knowing what you think -

1. Do you think targeting 12-14 year olds is OK or not?  
2. Would you let your kids use a system like Kwedit?  

Personally – this is the most evil company I’ve ever read about. There is no amount of spin that can justify getting kids hooked on both virtual goods and virtual credit.  

Aren’t there laws against using credit cards with kids?

Actually there are – the new Credit Card Act of 2009 forces parents to co-sign for students’ credit cards.

1. Young adults must show ability to repay credit card debts or proof of income. 
2. Alternatively, parents or other adults must co-sign for anyone under 21 to get credit.

While we are passing laws that aim to prevent exploitation of 18-21 year olds by credit card companies we have start-ups that are trying to use credit based schemes to exploit 12-14 year olds.

Filed under: thoughts Tagged: | do no evil?