Latest news with #RAMS
Time of India
2 days ago
- Business
- Time of India
Westpac's RAMS falsified payslips for loan approvals: ASIC
BENGALURU | SYDNEY: Australia 's corporate regulator said the mortgage broking unit of No.2 lender Westpac had used falsified payslips from non-existent employers to approve home loans in a lawsuit filed on Wednesday. The Australian Securities and Investments Commission (ASIC) said RAMS Financial Group, a Westpac subsidiary until the bank shuttered the business last year, engaged in widespread unlicensed conduct from June 2019 to April 2023. The regulator made the allegations in a statement of facts agreed by Westpac, filed in a federal civil lawsuit, and published on Wednesday. The agreed statement said that in some cases it was unclear where the false documents originated but in others "RAMS franchisees or their employees ... knowingly submitted loan applications supported by false documentation or information or were complicit in doing so". The actions created "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 Deputy Chair Sarah Court said in a statement. RAMS has admitted to dealing with unlicensed mortgage operators, failing to properly supervise its representatives, and other shortcomings, ASIC added. Westpac said in a statement that RAMS had agreed to finalise the matter in court and "will continue to work cooperatively with ASIC to resolve the proceedings as quickly as possible". A 2019 Royal Commission aired widespread allegations of financial firms failing to take adequate due diligence before approving loans, resulting in tougher regulation. ASIC said it was seeking unspecified financial penalties from RAMS. Westpac said it expects its existing provisions to be enough to cover the cost of the lawsuit. Westpac shut down RAMS to new home loans in 2024, while continuing to retain the ongoing loans. The closure prompted RAMS franchisees to file a class action lawsuit against Westpac, claiming it improperly terminated viable businesses and was ultimately responsible for the loan processing errors. A franchisee spokesperson said the franchisees weren't consulted during the ASIC investigation and "the regulator's findings about RAMS' 'systemic organisational governance failure' and inadequate supervision reflect Westpac attempting to shift institutional failures onto franchisees". The date of the first hearing in ASIC vs Westpac is yet to be scheduled.
ABC News
3 days ago
- Business
- ABC News
RAMS accused by ASIC of faking payslips and contracts for home loans
Corporate regulator ASIC has sued Westpac home lender RAMS for allegedly engaging in systemic misconduct when arranging home loans, including faking payslips and contracts. Business reporter Daniel Ziffer unpacks the case.
The Age
3 days ago
- Business
- The Age
Fake payslips used to get loans approved in ‘systemic misconduct': ASIC
Staff at Westpac's RAMS home loan business submitted fake payslips from employers that did not exist to get mortgage applications over the line, the corporate watchdog says in a new court case alleging 'systemic misconduct' within the lender. 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. Loading 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.
Sydney Morning Herald
3 days ago
- Business
- Sydney Morning Herald
Fake payslips used to get loans approved in ‘systemic misconduct': ASIC
Staff at Westpac's RAMS home loan business submitted fake payslips from employers that did not exist to get mortgage applications over the line, the corporate watchdog says in a new court case alleging 'systemic misconduct' within the lender. 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. Loading 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.
West Australian
3 days ago
- Business
- West Australian
ASIC vs Westpac: RAMS Financial Group sued by regulator over home loan misconduct
The financial regulator will take mortgage company RAMS, a wholly-owned subsidiary of Westpac, to court for 'systemic misconduct' in arranging home loans, including doctoring payslips and expenses. The Australian Securities and Investment Commission (ASIC) alleges RAMS breached its obligations as a lender, failing to perform proper oversight of franchisees from June 2019 and April 2023, resulting in 'widespread misconduct'. ASIC alleges RAMS' franchisees submitted false pay slips from non-existent employers and altered customers' liabilities and expenses to enable them to meet loan serviceability requirements. In another example, a RAMS franchise employee was found to be involved in manufacturing a fake contract of sale for a home. 'This is a systemic organisational governance failure by RAMS, who did not adequately supervise its franchise network,' 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.' RAMS, founded 33 years ago, became one of the most prominent non-bank lenders and was instrumental in shaking up the banks' stranglehold on the mortgage market. The company was purchased by Westpac in 2008, when it hit financial pressure during the Global Financial Crisis. Westpac had tried to offload the company but the investigation by ASIC, launched in May 2024, scuppered those plans. In August 2024, Westpac closed the RAMS business, including shutting down all franchisee offices, absorbing the $31.8 billion mortgage book. RAMS has admitted liability for contravening the Credit Act, and completed a remediation program. Westpac said it would work cooperatively with ASIC to resolve the proceedings and 'expects existing provisions should be sufficient to meet the financial outcome of the proceedings, subject to court approval.' ASIC is seeking 'pecuniary penalties', with the first hearing yet to be scheduled.
