Yahoo Finance ‘Inappropriate’ program banned from Victorian schools after 90 years
The Commonwealth Bank’s Dollarmites program will be banned from Victorian schools from 2021, in a move that has been applauded by consumer advocates.
Victorian education minister James Merlino announced the ban on Sunday, claiming that several banks’ and financial institutions’ had used “inappropriate tactics” to lure children into building loyalty with banks.
Under the ban, banks and financial institutions will no longer be able to deliver school banking programs in the state’s schools, with school-led programs set to replace them. The Commonwealth Bank’s Dollarmites program is one of the most prominent bank-led schemes.
Merlino said there was “little evidence” that bank-led programs improved financial literacy, and said the interest rates offered through the school banking program were often “unfairly low”.
“There have also been reports around the inappropriate promotion of credit cards to primary school aged children,” he said in a statement.
Dollarmites was first established in 1931.
Consumer advocacy group CHOICE welcomed the decision and called on other state and territory governments to ban the programs.
“Programs like the Commonwealth Bank’s Dollarmites are little more than slick marketing programs aimed at primary school aged children,” said CHOICE CEO Alan Kirkland.
“CHOICE research in 2017 found that 46 per cent of people got their first account with Commonwealth Bank, and a third kept this account into adulthood. That shows the real value of Dollarmites – it is an extremely effective marketing scheme.”
CHOICE named Dollarmites one of the worst products of 2018 in its Shonky awards, describing it as a “disgraceful” infiltration of primary schools.
The Australian corporate regulator has also taken aim at the scheme, while financial commentator Scott Pape has blasted it for its “cutthroat” behaviour.
A Commonwealth Bank spokesperson said the decision was disappointing and will hurt children and families across Victoria.
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