The Commonwealth Bank of Australia created its youth banking product, Dollarmites, 80 years ago and went on to dominate the Australian banking market as a result. Things have however begun to unravel a bit this year through some over aggressive selling, picking up a 2018 “Shonky Award” along the way as reward.
The awards, which are handed out by consumer advocacy group Choice, name and shame brands that fail to give Australian consumers a fair deal. Choice CEO Alan Kirkland said the awards revealed the questionable tactics used to sell poor performing products.
“There’s little doubt that this year’s winners are giving Australians a bad deal,” he said.
Commonwealth Bank’s Dollarmites program which came under fire for using slick marketing and offering commissions to primary schools in exchange for running the banking scheme. The program offers commissions including a one-off payment of $200 when the first student makes their initial deposit, annual rewards of up to $600 a year and ongoing payments of $5 for every 10 deposits per student.
ABC News revealed that the Commonwealth Bank last year paid a total of almost $400,000 to state schools across Queensland, in a bid to encourage more students to join. Under the scheme, the Commonwealth Bank offers schools $200 a year for taking part, an additional $100 for every 100 students who sign up and $5 for every 10 deposits made by a student.
Children’s banking offers banks, children and their families a lot of upside in terms of growth, financial literacy and a platform for having money conversations. Its very important that any marketing undertaken is well though through and the example of CBA remembered. Any attempts to pay schools to bring in customers should be treated with a lot of care.