Fake payslips used to get loans approved in ‘systemic misconduct': ASIC
The Australian Securities and Investments Commission (ASIC) on Wednesday launched legal action against RAMS, a home lending business that Westpac bought in 2007. Westpac closed RAMS to new customers in August last year.
The case, which follows investigations by ASIC, alleges RAMS was in breach of the Credit Act by failing to properly supervise representatives of the company, and it says this resulted in 'widespread misconduct' by RAMS franchisees and staff.
RAMS admitted it conducted business with unlicensed persons, failed to properly supervise its representatives, and failed to have proper policies and procedures in place.
Westpac, which has previously acknowledged misconduct in RAMS, said RAMS was working with ASIC to resolve the proceedings as quickly as possible.
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A statement of agreed facts submitted by ASIC said Westpac launched a review of the RAMS franchisee network in late 2022, which resulted in Westpac remediating 48 customer loans worth $7.6 million. The statement describes various types of misconduct including a case involving loan applications being supported with 'false payslips from non-existent employers'.
The statement also says Westpac's internal investigations had uncovered cases where loans were submitted with the borrowers' expenses altered to allow the loan to pass the bank's credit tests.
ASIC also laid out cases where RAMS representatives accepted business referrals from unaccredited 'referrers' – people such as some accountants or lawyers who are authorised to receive a commission in return for referring mortgage customers to a bank.
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