Culture

Remember The Dollarmites? They’re Now At The Centre Of A Massive Banking Scandal

You can't trust anyone these days.

Oh boy. This is a tough one. An investigate report by Fairfax Media has found that Commonwealth Bank employees set up thousands of fraudulent children’s savings accounts in order to meet internal targets and earn bonuses.

That’s right folks. Your mates the Dollarmites? They were in it up to their neck.

According to the report by Fairfax reporter Adele Ferguson, the scam involved employees illegitimately activating Youthsaver accounts that had been set up by parents via the Commonwealth Bank’s school banking program (better known at Dollarmites) but did not contain any actual money. Since the sign-up would not count towards internal sales targets unless a deposit was made in the first 30 days, employees would deposit a small amount of money into the account themselves to ensure that it was counted.

The matter first came to the attention of senior management at the bank in 2013. An internal investigation found that at 150 branches, as many as 5347 Youthsaver accounts contained less than $1 in deposits. According to the Fairfax report, “managers were asked to look into them to see if they had been fraudulently set up using illegitimate sources of funds”, but the bank chose not to broaden the investigation to include the almost 900 other branches that were in operation at the time.

Ultimately, no disciplinary action was taken against employees. In an email obtained by Fairfax, one senior manager said “the issue is widespread, it would seem unfair to name a handful when more are involved”.

The bank did not inform any of the customers or schools involved.

“While this practice did not financially harm any of our customers, it was a breach of their trust,” Commonwealth Bank chief executive Matt Comyn told Fairfax. “For that I’m deeply sorry”.

“When customers open an account, they put their trust in us and that’s particularly true when the account holder is a child,” he added. “After we identified this practice by some staff in 2013, we immediately made changes to end it, and we are not aware of any evidence that the practice has occurred again in the past five years.”

Comyn stressed that any financial rewards employees might have gained by the gaming the system were minuscule, so much so that “they would have been better off, as a financial incentive, keeping the coins themselves”.

The scandal comes just a few short weeks after it was revealed that the Commonwealth Bank lost the data of millions of its customers but decided not to tell them about it.