Teaching Kids to Get into Interactive Debt

Next mealtime, expect your kids to pester you to take out a loan on a new Scion. They’ll probably have filled in the forms for you.

A month ago the NYT wrote about how a kids’ virtual world website, Whyville, was cutting a deal with Toyota to promote the Scion, allowing the youngsters to buy a virtual car in exchange for clams, the Whyville currency they earn by solving puzzles (read Heather Green’s piece over at BusinessWeek for a good overview of Whyville). If you’re having trouble following this, join the club: Think product placement in a kids’ version of Second Life. The idea here is that the 8–15 year olds who inhabit this virtual world would get all excited about the “small, boxy” Scion, buy it to zip around the virtual island and then start pestering their parents to buy a real one.

The idea worked. The NYT says that visitors to the site mentioned the word Scion more than 78,000 times. A month later, the term “Scion” has been used another 120,000 times and Whyvillians — the kids playing the online game — have purchased more than 1,200 Scions and gone on 140,000 rides in their cars.  As NYT quoted the chief operating officer for Whyville, Jay Goss: “By definition, this is a sponsor of Whyville that can’t have as its customers the kids who visit the site. But they know that kids influence parents, and kids grow up.”

Now apart from the general creepiness of how much the folks who run Whyville know about what their citizens are up to, and the extension of the old Pester Factor from kids urging parents to buy them toys to urging them to buy new whole cars, get this: As of today, they can buy a virtual Toyota Scion xB on credit, “learning in the process about interest rates, down payments, credit and leasing and their applications in real life”. This from a press release:

“Whyville Scion Solutions is a perfect example of motivated, engaged learning,” explains Dr. Jen Sun, President of Numedeon, Inc., Whyville’s parent company. “The Scions are a huge hit with our kids. They want cars! But most citizens just don’t have enough clams.  We’ve set up the motivation for them to learn what it means to take out a loan.  They’ll learn about interest rates, down payment, credit history, and, perhaps most important of all, being responsible.  If you default on your loan, you’ll lose your car, and your credit history will be ruined so that you can’t take out another loan.  Educators and researchers know that students learn best when they really care about the topic.  That’s exactly what we try to do in Whyville.”

This is all done via more product placement, this time by a virtual Toyota Financial Services advisor “who walks them through the loan process and helps them learn about their “WhyCO” scores.  The WhyCO is designed to emulate the FICO® in real life.  A Whyvillian’s WhyCO score depends on a number of factors including his virtual income, ownership of a Whyville house or business, number of log-in days in Whyville, and leadership roles in the community.  Based on these factors, a loan application is approved or rejected. Citizens who do not qualify for a loan by themselves can get loans if they are co-signed by wealthier friends. The Toyota Financial Services advisor will also point applicants to on-line resources to help applicants understand the details of financing, leasing, interest rates and credit.”

On one hand I applaud the idea. Why shouldn’t kids learn about buying on the Never Never, plunging into debt, meeting the Repo Man, getting thrown out of their house and generally living beyond their means? But is the idea of buying things you can’t actually pay for the sort of lesson one should be teaching kids? My grandad would be turning in his grave. But not for Whyville — in only a few days since opening, the Scion Solutions office has already approved several thousand loans — and not for Toyota Financial Services, which whose “interactive marketing manager”, Maria Tirado, says

“We’d like to have educated customers down the road, and this program is a terrific opportunity to help tweens understand the process of financing a vehicle, everything from interest rates to FICO scores to repaying the loan.”

Does this mean kids, now thoroughly familiar with the credit process, will now pester their parents to buy a new car with a loan? Is this the world we’ve been working towards?