Dollarmites Is Getting Kicked Out Of Victorian Schools After Years Of Scandals
“Victorian students deserve high quality financial literacy, free from commercial interests," said Minister for Education James Merlino.
Remember Dollarmites? The bright yellow envelopes courtesy of Commonwealth Bank Australia (CBA), seemingly helping primary school kids get in the habit of saving? Well, as someone who spent many a days longingly watching primary school kids depositing their gold coins for future life savings because my parents did not allow me to participate, I feel like I am finally getting avenged. Because yes, my parents were right, the program was a sham, and now the Victorian government is doing something about it.
Starting next year, Dollarmites along with other “low-quality” school banking programs run by financial institutions will be banned from schools. But don’t worry, they will be replaced by school-run programs actually teaching financial skills to young Victorians, which will include practical information on how to avoid financial scams.
“Victorian students deserve high quality financial literacy, free from commercial interests — that’s why we’re banning financial institutions from delivering school banking programs,” said Minister for Education James Merlino.
I actually just closed my account that started with dollarmites a couple of days ago.
It's crazy how much business they must've gotten from that program.
— Jordan Mays (@Elfishguy) November 29, 2020
This is a pretty big move considering 60 percent of Australian schools participated in school banking programs in 2019. Dollarmites — the most successful of these programs — reaches over half a million children every year, as is worth an estimated $10 billion to the CBA. The program has been regarded as an extremely effective tool for attracting customers, as more than two thirds of customers who sign up to banks at school becoming lifetime customers of that bank.
In recent years, the programs have come under increasing public scrutiny.
In 2018, it was revealed CBA paid Queensland public schools to get more students to join Dollarmites. A scheme paid schools $200 per year for taking part in the program, plus $100 for every 100 students who join, and $5 for every 10 deposits made by students — this added up to almost $400,000 in payments made from the bank to schools. This was in addition to the incentives students themselves received in the form of reward items like toys, pencil cases and that holographic ruler.
In the same year, it was also found that staff at CBA were illegitimately activating school banking accounts to earn bonuses and meet performance targets. Yea, really. And the program continued.
Corporate regulator, Australian Securities and Investments Commission (ASIC), later found there was “limited evidence” these programs created good financial habits in students. They also confirmed that school banking “increases the chance” children will remain with the same bank when they’re adults.
Finally. Now start teaching kids about tax, super, how to know if they are being underpaid, investing!
— Rain Morgan. ❤️ In CANBERRA! (@RainMorgan33) November 29, 2020
The very effective Dollarmites that means that now as a man in his late 30’s my main banking account is still done with CBA.
Not sure it actually taught me anything about saving however.
— Dr. Shaun (@flemsha) November 28, 2020
I still remember the jingle…
🎶 ‘We make saving fun and easy, whatever the amount. Your dollar might go further in a Dollarmite account. At the Commonwealth Baaaaank’ 🎶
They were good at marketing…
— Ryan Batchelor (@ryanbatchelor) November 28, 2020
The ban will mean a loss of $4 million in contributions by the CBA’s financial literacy program, and it will affect 100,000 students across 500 Victorian schools.
The CBA said in a statement it was “surprised and disappointment with this decision by the Victorian Government”.
“We will be supporting our impacted teams and school partners across Victoria and determining what this means for them going forward.”