Keep your kids from being accidental fraudsters

New technologies are so intuitive that even young children can use them. Problem is, they don’t always understand the implications when money is at stake.

Alexa…can you get me a doll house?” Those were the words six-year-old Texas girl Brooke Neitzel said aloud in her home earlier this year, resulting in a US$170 KidKraft Sparkle Mansion Dollhouse being charged to her parents’ credit card and delivered to her door.

Alexa is, of course, not a generous relative or friend of the lucky Brooke, but rather the voice-activated personal assistant on Amazon’s Echo. The device, which is expected to launch a Canadian version this year, looks like a speaker but is always listening. Similar to Apple’s Siri, Echo is triggered as soon as you call out “Alexa” and can do any number of convenient things on your command, including adjust your home thermostat, play some tunes or search for a product and place your order. (Google Home is a similar gadget that launched stateside last year and is expected to arrive in Canada in 2017.)

All this technology is well and good… until your six-year-old starts using it without your knowledge and inadvertently buys a really expensive toy. While Brooke’s innocent Echo purchase made international news, it’s certainly not an isolated case. Just a few weeks earlier, Ashlynd Howell, a six-year-old from Little Rock, Arkansas, spent US$250 on Pokémon toys from Amazon on her mother’s phone —which she unlocked using her sleeping mother’s thumb!

In both these examples, there were extra security measures the parents could have taken to prevent the accidental purchases. For example, the Echo has parental controls that require a four-digit password to authenticate purchases. Similarly, while it’s a pain to input your credit card data every time you make a purchase, perhaps it’s best not to save the card number in any of your online accounts when you have young children.

Aside from the security procedures, though, it’s important to talk to your kids about money and how it works. Explain how money is earned through hard work and that it allows your family to pay for the things you all need—a place to live, food, clothes—as well as fun stuff, like toys. Be clear that items online are typically not free; so even if they think they aren’t spending money to get something, they probably are and should always ask you first.

And, given that both Brooke and Ashlynd were only six years old, the younger you can have these chats with your kids, the better.

Keep the conversation going

Have you or your kids ever accidentally spent money online? How did it happen and what was your reaction?  Post a comment below.


The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Tamar Satov

Managing Editor, CPA magazine
Tamar is a journalist specializing in business, parenting and personal finance. She blogs regularly in this space with advice and anecdotes on her efforts to raise a money-smart kid.