Why consumer advocates want Commonwealth Bank’s Dollarmites kicked out of schools
Consumer advocates have long slammed Dollarmites as marketing masquerading as financial literacy. Photo: Choice
The Commonwealth Bank is facing further backlash against its long-running Dollarmites scheme, as consumer advocates renew calls for the controversial kids’ banking program to be kicked out of primary schools.
On Monday, the Australian Securities and Investments Commission released its first consultation paper as part of a review of school banking programs launched last October in response to heavy criticism of the scandal-plagued bank’s ‘youth saver’ program.
A staggering 60 per cent of Australian primary schools participate in school banking programs, ASIC found.
The corporate watchdog called for public input on how the programs are implemented and marketed in schools, with the outcome of the review expected in early 2020.
“Young people are engaging with money every day and they need to understand financial concepts and develop the skills to identify financial services that are right for them,” ASIC Commissioner Sean Hughes said.
“It is important for ASIC to understand the range and extent of impacts that school banking programs can have on students, parents and school communities, as part of our responsibility to ensure the financial sector is delivering for all Australians, and especially for future generations of financial consumers.”
Choice slams ‘dodgy’ Dollarmites
The Dollarmites school banking program is a household name in Australia, having first launched in 1931.
“Before World War II, it was common for banks to visit schools and speak to students about the role of banks and the importance of saving money,” ASIC’s consultation paper said.
“Today, there are a number of authorised deposit-taking institutions (ADIs) – banks, credit unions, building societies and other mutual organisations – offering school banking programs.”
Dollarmites has been remarkably effective as a tool for attracting customers to the Commonwealth Bank, which boasts 1.6 million existing ‘youth saver’ accounts with an estimated 120,000 new accounts opened each year.
Last year, Commonwealth Bank staff were found to be fraudulently activating accounts for school children to earn bonuses and meet performance targets.
Leading consumer advocate Choice handed the “dodgy” Dollarmites program a ‘Shonky Award’, an annual award for the “shonkiest products and companies taking advantage of Australian consumers”.
Research by Choice revealed that 46 per cent of Australians had opened their first account with the Commonwealth Bank, with 35 per cent retaining the account as an adult.
The Dollarmites program is estimated to be worth $9.9 billion to the bank.
Choice is ramping up its campaign for the program to be kicked out of schools, calling on concerned parents to write to ASIC.
Commonwealth Bank doesn’t care about education,” Choice consumer advocate Jonathan Brown said.
He slammed Dollarmites as a “thinly veiled marketing program to turn our kids into customers for life”.
“If Commonwealth Bank really cared about education we would have a whole generation of Australians feeling secure and financially sound,” Mr Brown said.
“Instead we’ve got some of the highest household debt in the world.”
Parents across the country have told Choice they are “fed up with their children being targeted as future customers,” Mr Brown said.
“Commonwealth Bank are relying on nostalgia and memories of toys and cartoon characters to avoid scrutiny.
“It’s vital that every Australian parent who is worried about corporations in our schools speaks up. Our kids need us to speak up.”