Watchdog accuses home loan provider of 'systemic organisational governance failure'
Australia’s corporate watchdog has launched civil penalty proceedings against RAMS Financial Group, the mortgage brand owned by Westpac, over alleged “widespread misconduct” in its home loan operations.
The Australian Securities and Investments Commission (ASIC) alleged RAMS breached its obligations under the National Consumer Credit Protection Act by dealing with unlicensed referrers, failing to monitor its representatives, and enabling practices that risked customer detriment.
RAMS reportedly breached these obligations between June 2019 to April 2023 and involved falsified documents, fake employers, and manipulated financial details to push loans through.
“This is a systemic organisational governance failure by RAMS,” ASIC deputy chair Sarah Court said. ”RAMS allowed years of unlawful conduct to occur across its franchises, creating the opportunity for loans to be provided to customers who otherwise may not have qualified for those loans, and thereby increasing commissions earned by RAMS franchisees.”
ASIC alleges AMS franchise staff were found to have submitted false pay slips from non-existent employers and altered customers’ liabilities and expenses to enable them to meet serviceability requirements to get the loan application over the line.
In another alleged example, a RAMS franchise employee was found to be involved in manufacturing a fake contract of sale for a home.
Westpac Shut RAMS to new home loan applications in August 2024 and has begun absorbing its $31.8 billion loan book into Westpac’s operations.
