I still remember receiving my Dollarmites deposit wallet as a kid. I felt like a real grown-up with my fancy cheque book… even if I had no actual money.
On the face of it, The Dollarmites Club was a pretty clever initiative: it got kids saving and got CBA a slew of loyal customers – but its kid-friendly guise has completely crumbled over the past few days.
An investigation by the Sydney Morning Herald revealed that thousands of children’s accounts were fraudulently set up and manipulated by staff for financial gain.
Apparently, branch staff don’t qualify for a bonus if a deposit isn’t made into a child’s Dollarmite account every 30 days. So, the CBA staff used either the bank’s money or their own loose change to make small payments of just a few cents and thus receive their bonus.
This really shouldn’t come as a surprise – since the banking royal commission began last December we’ve heard evidence of appalling behaviour by Australia’s big four banks.
But there’s nothing like taking advantage of kids to spark public outrage.
CBA’s chief executive, Matt Comyn, told Fairfax the practice had no detrimental effects on customers.
“While this practice did not financially harm any of our customers, it was a breach of their trust. For that I’m deeply sorry.”
Also, I was kind of hoping that the 20 cents some CBA staffer put into my Dollarmites account all those years ago might’ve accrued interest and I’d be a millionaire by now.
Comyn added that the financial incentives received by staff were also small – a maximum of $1.76 over a year.
“They would have been better off, as a financial incentive, keeping the coins themselves,” he said.
Irrespective of the dollars at stake, it’s pretty messed up that we got played by a bunch of weird looking parasites/monsters.
Seriously – were they supposed to be giant alien tentacle-ticks or something?
The matter first came to the attention of CBA’s senior management back in 2013.
An internal investigation found that at 150 branches were involved but no disciplinary action was taken against employees and the bank didn’t inform any of the customers or schools involved.
Australia’s largest consumer group, CHOICE, is using this opportunity to renew its calls to ban school banking schemes.
“School banking programs such as the Commonwealth Bank’s Dollarmites program give banks unfettered access to market their brand to school children,” says CHOICE CEO Alan Kirkland.
“These schemes, which give schools a kickback for every new account opened by a child, allow banks to cement relationships with children as young as five in the hope that they become lifelong customers.”
But let’s face it, even with the banks’ bad behaviour being exposed there’s no doubt they’ll continue with these insidious measures to ensure customer loyalty.
How else are they going to do it? Surely not by being actually honest.