- Oops!Something went wrong.Please try again later.
It was dubbed the “worst product of 2018”, and now the Commonwealth Bank’s Dollarmites program is under fire from the Australian Education Union (AEU).
In a letter to education minister, Dan Tehan, the AEU has expressed its concerns over unregulated school banking programs.
Generally marketed as financial literacy education programs, the Dollarmite program has been mired in controversy after bank staff were found to have opened accounts fraudulently to meet sales targets.
According to Choice, the Dollarmites program, which encourages children to engage with money by opening and depositing small amounts of money into a savings account, is “disgraceful” and an example of “unchecked corporate greed”.
“The Dollarmites program uses slick marketing to target primary kids at school, turning them into long-term customers of a bad-value bank,” Choice CEO, Alan Kirkland said at the time.
“Choice has found that 35 per cent of Australian adults still have their first bank account and this brand attachment often means they take out credit cards, home loans or other products with the same bank,” he continued.
The Australian Securities and Investments Commission (ASIC) also announced last year that it would launch an investigation into school banking programs, including Dollarmites.
ASIC deputy chair, Peter Kell said transparency and clarity around school banking programs is most important, and that the watchdog wants to “understand the motives” behind school banking programs.
The review, due to be completed by the middle of the year, will assess the implementation, marketing and outcomes.
However, the AEU is concerned banks will only be required to make minor changes after the review.
ASIC received criticism from the Royal Commission over its toothless attitude towards misbehaving banks and a preference for negotiation rather than punishment.
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.