Commonwealth Bank, facing public scrutiny, cleans up Dollarmites commissions

But the changes won't come into effect until 2018.

The Commonwealth Bank will stop kicking back commission payments to schools every time a student makes a deposit under its long-standing Dollarmites scheme.

The bank made the announcement late last night in response to criticism from CHOICE, which claimed the commission structure gave schools an incentive to sell the bank's products to primary students with unfettered access.

"We have heard Choice's concerns about these payments and will engage with the schools, P&Cs [parent and citizens associations] and consumer groups to introduce a change to the way payments are structured...that no longer links the payment to the value of students' deposits," the company says.

Schools will continue to be paid under the current commission structure until revisions are made in the upcoming new year. They currently receive a $5 commission upfront for every Dollarmites account activated, and a further 5% cut for every deposit made at the school, though the latter commission is capped at $10.

Commonwealth Bank paid $2.3 million in commission payments under the Dollarmites program to schools in 2016. It remains one of the largest programs to target children with over 326,000 active participants in Australia.

Changes to Dollarmites commissions come less than a fortnight after Commonwealth Bank announced it will eliminate fees from its ATMs, a move that prompted rivals NAB, Westpac and ANZ to follow within a 24-hour period.

But the announcements come at a time when distrust in banks is high, as the industry faces more than a dozen productivity commission inquiries, calls for a royal commission and allegations CBA breached anti money-laundering and terrorism-financing laws.

Leave a comment

Display comments