ASIC has sued RAMS, alleging it engaged in systemic misconduct when arranging home loans.
The corporate regulator, ASIC, has accused the Westpac-owned brand of breaching its obligations as an Australian Credit Licensee and engaging in widespread unlicensed conduct between June 2019 to April 2023.
In August 2024, Westpac closed the RAMS business, including all franchisee offices, and the A$31.8 billion in outstanding RAMS loans would be absorbed into the Westpac loan book.
RAMS admits that in conducting business with unlicensed individuals, it failed to supervise its representatives properly and failed to have adequate policies and procedures in place, resulting in widespread misconduct by its franchisees and their staff, in breach of the National Consumer Credit Protection Act 2009.
ASIC deputy chair, Sarah Court said said it was an organisational failure from RAMS, who failed to adequately supervise its franchise network.
“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.
“RAMS franchise staff were found to have submitted false pay slips from non-existent employers and altered customers’ liabilities and expenses to enable them to meet serviceability requirements to get the loan application over the line, while in another example a RAMS franchise employee was found to be involved in manufacturing a fake contract of sale for a home.”
The date for the first case management hearing is yet to be determined.
In response, Westpac, parent company of its subsidiary RAMS Financial Group Pty Limited (RFG) issued this statement: "RFG will continue to work cooperatively with ASIC to resolve the proceedings as quickly as possible. Westpac expects existing provisions should be sufficient to meet the financial outcome of the proceedings, subject to court approval.
“Following a review of the RAMS business, RFG completed a remediation program. RFG closed the RAMS business to new home loan applications from 6 August 2024. RAMS customers continue to access services through the RAMS app, website and call centre.”
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