Victorian government bans school banking
Victoria will ban all school banking programs, including the Commonwealth Bank's well known Dollarmites, following ongoing concerns banks and financial institutions were using inappropriate tactics to lure children and promote credit cards.
Leading consumer group Choice is now calling for other states to follow Victoria's lead and outlaw the controversial school financial literacy programs.
Dollarmites is worth about $10 billion to the Commonwealth Bank.Credit:Fairfax Media
School banking has been hit with a series of scandals in recent years. This has included an expose by The Age and Sydney Morning Herald in 2018 that CBA staff had fraudulently set up thousands of accounts in the names of children without parental consent to claim bonuses. In 2019, it emerged that junior primary school children, some as young as eight years old, were being introduced to the concepts of credit cards through their school banking program.
Victorian Minister for Education James Merlino announced the ban on Sunday, saying the Victorian school curriculum included financial literacy.
"Victorian students deserve high-quality financial literacy, free from commercial interests – that’s why we’re banning financial institutions from delivering school banking programs."
"The Victorian curriculum sets our expectations for financial literacy and that must be our focus. It is time to draw a line under this issue."
The state government's concerns include complaints from students, teachers and families about the quality of the education and the financial literacy outcomes of the programs. There are also concerns about the tactics some banks have used, including luring children with prizes to build brand loyalty in young children. Another concern is the interest rates offered through the school banking programs are low compared to adult banking products.
Consumer group Choice has called upon other state and territory governments to follow the Victorian government’s move to ban the programs.
"Programs like the Commonwealth Bank’s Dollarmites are little more than slick marketing programs aimed at primary school aged children," Choice chief executive Alan Kirkland said.
"Choice has never been able to find any evidence that programs like the Dollarmites have any impact on long-term savings habits. The only impact they have is to give the Commonwealth Bank a steady stream of young customers, many of whom stick with the Commonwealth later in life.
"We welcome the Victorian government’s commitment to genuine financial literacy programs."
The Commonwealth Bank and the peak body representing the banking industry, the Australian Bankers Association, have been contacted for comment.
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