‘Little value’: Dollarmites banned from QLD schools
Queensland has become the latest state to ban the Commonwealth Bank's school banking program following a scathing review by the corporate regulator.
The state's Education Minister Grace Grace said the decades-long Dollarmites program fails to provide financial literacy to students and won't be renewed when the contract expires in July.
The call to end the 50-year initiative from the major bank follows the program being banned in Victoria in the wake of the review from the Australian Securities and Investments Commission (ASIC).
"The ASIC report demonstrated that there was little value in the program and often the true intention of the program wasn't disclosed," Ms Grace said.
"There wasn't a terrible amount of financial education that was taking place so based on that extensive report and based on research of my department and also based on stakeholder consultation we've decided that at the end of the contract term, which is July this year, we will not be renewing that program."
In December, the corporate regulator slammed the Commonwealth Bank's program as little more than a marketing tactic to build brand loyalty to vulnerable customers under the age of 18.
"Young children are vulnerable consumers and are exposed to sophisticated advertising and marketing tactics by school banking program providers," ASIC said in its findings.
"School banking program providers fail to effectively disclose that a strategic objective of these programs is customer acquisition."
It also found schools were incentivised by banks by additional funding if the respective primary or high school offered the bank's savings program.
According to the regulator, schools received $1.3 million in commission payments for using school banking programs.
Commonwealth Bank has the most influential banking program known as Dollarmites, which has been implemented across schools nationally, with Minister Grace also revealing Bendigo Bank will not go ahead with its own version of the school banking program.
The corporate watchdog's survey found 68 per cent of parents were concerned about banks creating marketing material that targeted children.
It also showed 61 per cent of respondents believed it was just a tactic for the bank to attract new customers.
ASIC's report found 63 per cent of schools in Australia offered banking programs, with more than 90 per cent of those signed up to CBA's Dollarmites program.
A child under 12 with a Youthsaver account automatically joins the Dollarmites Club.
Originally published as 'Little value': Dollarmites banned from QLD schools