In submissions to ASIC's school banking review, CHOICE and concerned parents have revealed the Commonwealth Bank is spruiking the benefits of credit cards to year 3 students.
"Over 500 teachers, parents and community members have helped CHOICE expose the flaws in school banking and shared their perspectives with ASIC. Their views reveal widespread concern with banks marketing their products in schools" says Alan Kirkland, CHOICE CEO.
CHOICE's full submission is available for download here - including samples of parents' submissions.
Introducing credit cards to year 3 students
CHOICE's submission to ASIC highlights some of the shocking tactics from Commonwealth Bank, including exposing children to the supposed benefits of credit cards as early as Year 3 through its Smart Start program.
"It is alarming that the Commonwealth Bank is introducing kids to the idea of credit cards from Year 3. Credit cards are complex products with tricky terms and conditions that are designed to make money for banks" says Kirkland.
CHOICE argues that allowing one bank unrestricted access to market in a school raises serious competition concerns.
"We urge ASIC to consider the competition implications of school banking schemes in Australia. Allowing one bank unrestricted access to market in a school raises serious competition concerns" says Kirkland.
"The most important lesson we can teach our children is the value of comparing products and switching banks, because we know that people who don't switch pay more. The Commonwealth Bank has no interest in teaching kids to compare and switch because the whole point of Dollarmites is to pick up customers early and encourage them to stay for life."
Parents volunteered time - now calling out Commonwealth Bank
In a submission shared with CHOICE, Rosemary Donald from the inner west of Sydney estimated the Dollarmites program took over 80 hours of volunteer time per year, but only generated $1000 for her children's school through the program.
"It took up to 2 hours of volunteer time every week and the P&C got less than $1000 at the end of the year" says Rosemary.
"That's a lot of volunteer hours for a small amount of actual money that goes towards the kids. Ultimately they shouldn't be in schools with their branded products."
Kirkland says the supposed benefits to schools and students just aren't there.
"These payments have nothing to do with altruism – they're clearly tied to the sale and promotion of Commonwealth Bank products" says Kirkland.
CHOICE's submission is available for download here.
Media contact: Katelyn Cameron, email@example.com, 0430 172 669