It seems schoolchildren are considered fair game by the big banks......
Junkee, 19 May 2018:
Oh boy. This is a tough
one. An investigate report by Fairfax Media has found that Commonwealth Bank
employees set up thousands of fraudulent children’s savings accounts in order
to meet internal targets and earn bonuses.
That’s right folks. Your
mates the Dollarmites? They were in it up to their neck.
According to the report
by Fairfax reporter Adele Ferguson, the scam involved employees illegitimately
activating Youthsaver accounts that had been set up by parents
via the Commonwealth Bank’s school banking program (better known at
Dollarmites) but did not contain any actual money. Since the sign-up would not
count towards internal sales targets unless a deposit was made in the
first 30 days, employees would deposit a small amount of money into
the account themselves to ensure that it was counted.
The matter first came to
the attention of senior management at the bank in 2013. An internal
investigation found that at 150 branches, as many as 5347 Youthsaver
accounts contained less than $1 in deposits. According to the Fairfax
report, “managers were asked to look into them to see if they had been
fraudulently set up using illegitimate sources of funds”, but the bank chose
not to broaden the investigation to include the almost 900 other branches
that were in operation at the time.
Ultimately, no disciplinary
action was taken against employees. In an email obtained by Fairfax, one senior
manager said “the issue is widespread, it would seem unfair to name a handful
when more are involved”.
The bank did not inform
any of the customers or schools involved.
The
Sydney Morning Herald,
18 May 2018:
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….
“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.
“This raises serious questions about the
culture of the entire bank,” he said
While over at the Banking and Finance
Royal Commission………
ABC
News, 21 May
2018:
The banking royal
commission has heard an elderly, seriously ill woman faced homelessness after
her daughter's business failed.
Carolyn Flanagan cannot
read or write due to blindness caused by glaucoma, she has trouble speaking due
to the effects of cancer surgery, suffers memory loss and has osteoporosis,
among other medical problems.
The pensioner sought
help from Legal Aid NSW when Westpac tried to take her home, which was used to
guarantee her daughter's loan. A complaint was taken to the Financial Ombudsman
Service, which found in Westpac's favour.
It was only a last-ditch
effort by Ms Flanagan's Legal Aid lawyers that managed to keep her in her home.
Solicitor Dana Beiglari
told the hearing her manager at the time "contacted another consumer
advocate to see if he had a senior contact at Westpac who we could escalate
this matter to, given our client was facing homelessness in her old age".
Ms Beiglari sent a letter
to Westpac outlining Ms Flanagan's medical circumstances and managed to secure
a "life interest" in the property for her, which means she can remain
in the home until she dies or decides to sell.
Counsel assisting the
inquiry Michael Hodge QC asked Ms Beiglari about the Westpac employee's
response to the case.
"What that employee
of Westpac expressed to you was surprise with the thought that Westpac would be
evicting and it wasn't in line with what Westpac would normally do?" he
asked.
"Yes, that's correct,"
Ms Beiglari answered.
Ms Flanagan maintained a
sense of humour under questioning. After Mr Hodge listed off her litany of
health issues, including depression, she quipped "that'd depress
anybody".
She gave her evidence
through a video link as she was too unwell to travel.
Westpac's lawyers
questioned her recollection of events and the amount of the loan.
Westpac executive
Alastair Welsh followed Ms Flanagan and Ms Beiglari in giving evidence. He said
there was nothing "technically" wrong with Ms Flanagan being allowed
to act as a guarantor.
"My review of the
file shows we followed the process I would want the bank to follow," Mr
Welsh said.
However, he admitted
there were some problems with the bank's handling of the case once the loan
failed.
The inquiry heard it was
Westpac policy to "exercise extreme caution" with parental
guarantees.
Mr Welsh admitted there
were warning signs in Ms Flanagan's case that should have been observed by the
banker.
"She suffers from
quite debilitating health conditions. Would that be a relevant factor?" Mr
Hodge asked.
Mr Welsh agreed and said
there were no comments on Ms Flanagan's file noting her condition.
The bank manager
involved is no longer employed by Westpac.
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