Commonwealth Bank Scam

Commonwealth Bank Corporate Opportunity Statement

Thousands of children’s Commonwealth Bank accounts were fraudulently set up by retail branch staff as part of a widespread scam to earn bonuses and meet aggressive performance targets.

The scam involved CBA staff either using the bank’s money, sometimes loose change or their own money to illegitimately activate Youthsaver accounts for financial gain.

They would do so when parents had signed up their kids for school banking, often referred to as Dollarmites, but had not deposited money into the account within 30 days. If no deposit had been made, the sign-up would not count towards sales targets and financial rewards.

A Fairfax Media investigation can also reveal that the scam is part of a broader culture of gaming financial incentives at the bank where staff were caught faking customer referrals to boost performance targets and earn rewards.

The school banking and customer referral scandals came to light inside the bank shortly after CBA's now chief executive, Matt Comyn, was appointed to run the retail operation in 2012.

Mr Comyn told Fairfax that the money taken from the bank and used by staff to open the Youthsaver accounts was very small, often loose change. He said the financial incentives received by staff were also small – a maximum of $1.76 over a year. He said there was no customer detriment.

“They would have been better off, as a financial incentive, keeping the coins themselves,” he said.
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But he said using today’s lens – in the wake of repeated scandals and with the backdrop of a royal commission – the action taken by the bank at the time wasn’t appropriate, irrespective of the dollars at stake.

“It goes to the heart of integrity,” he said.

“While this practice did not financially harm any of our customers, it was a breach of their trust. For that I’m deeply sorry. As CBA’s new chief executive, my number one priority is to expedite changes that will prevent any behaviour that undermines our customers' trust in us – and to remove any CBA employee who knowingly acts against our customers’ interests.”

The country’s largest consumer group, CHOICE, seized on the scandal to renew its calls to ban school banking schemes.

“It's a pretty basic expectation that bank staff will handle money honestly. Whether it involves five cents or $5 million, any mishandling of funds goes to the heart of trust in the institution,” CHOICE chief executive Alan Kirkland said.

He said if senior staff knew it was happening on a mass scale and did nothing about it, they were complicit in that fraud.