Latest news with #SarahCourt
Time of India
14 hours 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.
West Australian
2 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.
Epoch Times
2 days ago
- Business
- Epoch Times
Insurance Comparison Site Choosi Allegedly Made Millions in Commission Promoting 1 Company
The Australian Securities and Investments Commission (ASIC) has launched proceedings against insurance comparison service Choosi, accusing the company of misleading consumers. According to ASIC, insurer Hannover paid Choosi approximately $61 million in commissions between 2019 and 2024 to exclusively promote its insurance products. The regulator says that during this period, Choosi was responsible for the sale of 4,225 funeral insurance policies and 9,478 life insurance policies—all linked to Hannover. ASIC Deputy Chair Sarah Court said the enforcement action is aimed at protecting consumers trying to find the best insurance deals. One Insurer Behind the Illusion of Choice ASIC claims that since mid-July 2019, Choosi has mostly compared only Hannover-issued policies, with just one exception during the entire timeframe. Hannover, a global insurance provider, operates two Australian entities: one for property and casualty insurance and another for life and health insurance. ASIC says the $61 million in commissions was paid to ensure only Hannover's offerings were promoted on the site. 'We will contend people were led to believe they were making a sensible decision by comparing policies; however, they were denied genuine choice,' Court said in the statement. Although funeral insurance products on Choosi's site appear under three separate brand names, ASIC says all are underwritten by Hannover. Similarly, Choosi compares five life insurance policies that look distinct but are also issued by Hannover—except for a brief period before July 2023 when one additional insurer was included. ASIC says all policies were distributed by Greenstone Financial Services, a company affiliated with Choosi. 'What we're seeing here is the Choosi platform really being used by Hannover as just a platform to distribute its products, with no comparison going on with other insurers at all,' Court said. She added that the promotional campaign had been broad and long-running. 'We know that this was a very widespread advertising campaign by Choosi over many years ... and we know there have been thousands of policies that have been sold,' she said. ASIC criticises the company for presenting misleading information across multiple platforms—including Choosi's website, social media, TV commercials, and advertorials. Between July 1, 2019, and Nov. 30, 2024, Choosi is said to have sold thousands of policies under this arrangement. Court emphasised that if the Federal Court rules in ASIC's favour, 'it will be important for [ASIC] to seek substantial penalties.'
Epoch Times
2 days ago
- Business
- Epoch Times
ASIC Says Choosi Compared Policies From Just 1 Insurer
The Australian Securities and Investments Commission (ASIC) has launched proceedings against insurance comparison service Choosi, accusing the company of misleading consumers. According to ASIC, insurer Hannover paid Choosi approximately $61 million in commissions between 2019 and 2024 to exclusively promote its insurance products. The regulator says that during this period, Choosi was responsible for the sale of 4,225 funeral insurance policies and 9,478 life insurance policies—all linked to Hannover. ASIC Deputy Chair Sarah Court said the enforcement action is aimed at protecting consumers trying to find the best insurance deals. One Insurer Behind the Illusion of Choice ASIC claims that since mid-July 2019, Choosi has mostly compared only Hannover-issued policies, with just one exception during the entire timeframe. Hannover, a global insurance provider, operates two Australian entities: one for property and casualty insurance and another for life and health insurance. ASIC says the $61 million in commissions was paid to ensure only Hannover's offerings were promoted on the site. 'We will contend people were led to believe they were making a sensible decision by comparing policies; however, they were denied genuine choice,' Court said in the statement. Although funeral insurance products on Choosi's site appear under three separate brand names, ASIC says all are underwritten by Hannover. Similarly, Choosi compares five life insurance policies that look distinct but are also issued by Hannover—except for a brief period before July 2023 when one additional insurer was included. ASIC says all policies were distributed by Greenstone Financial Services, a company affiliated with Choosi. 'What we're seeing here is the Choosi platform really being used by Hannover as just a platform to distribute its products, with no comparison going on with other insurers at all,' Court said. She added that the promotional campaign had been broad and long-running. 'We know that this was a very widespread advertising campaign by Choosi over many years ... and we know there have been thousands of policies that have been sold,' she said. ASIC criticises the company for presenting misleading information across multiple platforms—including Choosi's website, social media, TV commercials, and advertorials. Between July 1, 2019, and Nov. 30, 2024, Choosi is said to have sold thousands of policies under this arrangement. Court emphasised that if the Federal Court rules in ASIC's favour, 'it will be important for [ASIC] to seek substantial penalties.'
Yahoo
2 days ago
- Business
- Yahoo
Major bank sued by ASIC over alleged dodgy home loans: 'Failure'
Westpac's mortgage broking subsidiary RAMS is being sued by the corporate regulator over allegations of 'systemic misconduct' when arranging home loans. ASIC has alleged RAMS staff faked pay slips and altered expenses and liabilities to get loan applications 'over the line'. ASIC alleges RAMS breached its obligations as an Australian Credit Licensee and engaged in widespread unlicensed conduct between June, 2019 and April, 2023. RAMS has admitted it conducted business with unlicensed persons, failed to supervise representatives properly, and failed to have adequate policies and procedures in place. ASIC deputy chair Sarah Court said this was a case of "systematic organisational government failure by RAMS who did not adequately supervise its franchise network'. RELATED CBA, NAB, ANZ pass on RBA interest rate cut today as Westpac's $2.4 million a day 'boon' exposed Centrelink cash boost over 400,000 Aussies have weeks left to confirm: 'Get what's yours' $1,831 Centrelink payment change coming within weeks: 'You'll get more' '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,' Court said. ASIC is seeking penalties against RAMS. RAMS previously operated as a standalone business within Westpac, through a franchise network of independent franchisees that wrote RAMS-branded home loans backed by Westpac. It was founded in 1991 and bought by Westpac in 2007 for $140 million. In August 2024, Westpac announced it would close the RAMS business including all franchisee offices and the $31.8 billion of existing RAMS loans would be absorbed into Westpac's loan book. RAMS has admitted liability for the contraventions and has remediated customers who were negatively affected by the misconduct. In a statement, Westpac said it would continue to work cooperatively with ASIC to resolve the proceedings 'as quickly as possible'.Error in retrieving data Sign in to access your portfolio Error in retrieving data
