Commonwealth Bank faces calls from the federal opposition for it to be punished over the "appalling" manipulation of children's savings accounts.
Over the weekend, a Sydney Morning Herald and the Age investigation revealed CBA staff had engaged in a widespread gaming of performance incentives by using either their own money, or bank funds, to illegitimately activate Youthsaver accounts.
Fairfax Media reported that some CBA retail branch staff did this in a bid to meet aggressive targets and earn bonuses.
“These are appalling revelations and unfortunately also the sort of behaviour Malcolm Turnbull wants to reward with a $17 billion tax handout,” Opposition Finance spokesman Jim Chalmers said.
“Labor wants to see the victims compensated for the rorts and rip-offs which are being uncovered, the Liberals want to compensate the perpetrators. Banks shouldn’t be rewarded for fiddling with kids’ bank accounts, they should be punished for it."
About two-thirds of the Youthsaver accounts with CBA are established by parents at CBA retail branches, with the other third associated with school banking.
The news has emerged at a time with Australian banks and the finance industry under enormous pressure, given the poor behaviour that has emerged before the royal commission into the sector.
CBA declined to comment about the children’s bank accounts revelations on Sunday, but the bank issued a statement on Saturday in which new chief executive officer Matt Comyn said the behaviour was a breach of trust with customers, for which he was “deeply sorry”.
Mr Comyn said he wanted to expedite changes that would prevent behaviour by CBA staff that undermined customer trust in the bank.
"When customers open an account, they put their trust in us and that’s particularly true when the account holder is a child. 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. There is now a line in the sand and we have zero-tolerance for behaviour such as this,” he said.
Contacted on Sunday a spokesman for the New South Wales Department of Education said banking for NSW school students was not centrally managed, and schools could make “local arrangements” with banks.
“Participation in the Dollarmites program is a matter for individual schools and parents can choose whether their children take part - the department does not centrally record which schools participate,” he said.
“The program supports students’ financial literacy and numeracy skills. Financial literacy is included in the NSW syllabus.
“The participation falls under the Department’s policy and guidelines on schools’ contact with businesses. This includes ensuring there is no endorsement of any product or service and the suitability of organisations."
A spokesman for the Victorian Education Department said: “Individual schools decide at the local level whether to introduce their students to banking products for children, such as the Commonwealth Bank's 'dollarmites' savings accounts."
The reporter owns shares in CBA.This article was first published by https://www.theage.com.au/
Author: Darren Gray