RAMS Financial Group – acquired by Westpac in 2007 and largely closed in 2024 – is being sued by ASIC following an investigation into its home loan practices.
The corporate watchdog has commenced civil penalty proceedings in the Federal Court, claiming the lender admitted its policies and procedures failed to prevent “widespread misconduct” by franchisees and staff.
Such misconduct may have resulted in borrowers being approved for mortgages they wouldn't have otherwise qualified for.
Providing loans to customers who might not have met serviceability requirements would have bolstered commissions realised by RAMS franchisees, ASIC deputy chair Sarah Court said.
"This is a systemic organisational governance failure by RAMS who did not adequately supervise its franchise network," she said.
"RAMS franchise staff were found to have submitted false pay slips from non-existent employers and altered customers' liabilities and expenses.
"In another example a RAMS franchise employee was found to be involved in manufacturing a fake contract of sale for a home."
The misconduct allegedly occurred between June 2019 and April 2023 and breached the Credit Act.
ASIC also accused RAMS of engaging with unlicensed referrers.
While RAMS is no longer open to new customers and its franchises have been closed, Westpac retains ownership of the brand and has absorbed $31.8 billion worth of RAMS-issued home loans into its portfolio.
RAMS will continue to work cooperatively with ASIC to resolve the proceedings as soon as possible, Westpac said in a statement on Wednesday.
It has remediated customers who were negatively impacted by the misconduct.
Image by rusyena on Unsplash
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