Court ruling comes after Westpac and ASIC seek settlement in RAMS case
The Federal Court has imposed a $20 million penalty on RAMS Financial Group after the company admitted to widespread failures in its home loan operations between June 2019 and April 2023.
The court determined that RAMS, as an Australian Credit Licensee, breached the Credit Act by engaging with unlicensed referrers, lacking sufficient arrangements to manage conflicts of interest, failing to properly supervise its representatives, and not ensuring that its credit activities were conducted efficiently, honestly and fairly.
The court also found RAMS did not implement effective controls following internal reports of potential misconduct. These issues included franchise staff submitting fabricated pay slips from non-existent employers and altering customers’ financial information to secure loan approvals.
“Financial entities must adhere to their obligations under the law and consumers must be protected from lending practices which can expose them to harm,” said Sarah Court (pictured right), deputy chair at the Australian Securities and Investments Commission (ASIC).
“[We] will continue to scrutinise those involved in the whole home lending process and will hold financial institutions accountable for misconduct.”
Justice Yaseen Shariff, in delivering the decision, stated: “The contraventions here were serious in that they pertained to obligations that are designed to proscribe unlicensed and other related conduct that is essential to protect consumers and to regulate industry participants including the representatives of licensees.
“I am satisfied that [RAMS’] contravening conduct exposed consumers to a risk of loss that the loans they entered may not have been suitable for their circumstances which also exposed them to a risk that they may have been unable to service their loans without substantial hardship, or may have defaulted on their loan repayments and incurred fees or charges, as a consequence of those defaults.”
Earlier this week, MPA reported that Westpac and ASIC appeared before the court to seek approval for a settlement in the ongoing RAMS home loan case.
RAMS, a wholly owned subsidiary of Westpac Banking Corporation, operated as a standalone entity within the Westpac Group through a franchise network. The company provided credit services for RAMS-branded home loans, primarily targeting first home buyers and self-employed borrowers.
In early 2024, Westpac began a sale process for RAMS, but this was terminated in April 2024. Westpac subsequently initiated the winding down of the RAMS business, with the franchise network ceasing operations by August 2024. Westpac and RAMS continue to support existing customers with RAMS-branded home loans.
On June 4, 2025, ASIC commenced proceedings against RAMS for systemic misconduct in the arrangement of home loans. RAMS admitted liability and has compensated customers who experienced detriment as a result of the misconduct.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
