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ASIC has commenced the proceedings in the Federal Court, over the program that involved home loan referrals to ANZ from third-party “introducers” from various professions, such as cleaners and real estate representatives.
The introducer received a commission if the home loan was granted.
Introducer programs had received considerable criticism in the banking royal commission and last year, NAB copped a $15 million penalty for contravening National Consumer Credit Protection laws through its introducer program.
ASIC has alleged that between June 2016 and March 2018, ANZ breached consumer protection credit laws by accepting customer information and documents from introducers and other unlicensed individuals when this was not allowed.
ASIC has also claimed some of the documents provided were fraudulent.
From 2015 to June 2020, more than 50,000 loans were referred to ANZ through the introducer program, resulting in lending of more than $18.5 billion.
In September 2018, the introducer program contributed to approximately 10 per cent of all home loans sold by ANZ’s branch network in Australia.
Three unlicensed third parties are being examined in the ASIC case, with ASIC claiming there were breaches of the National Consumer Credit Protection Act in relation to 74 home loan applications made between 2016 and 2018.
Sarah Court, deputy chair, ASIC stated the regulator is concerned loans may have been granted based on false information and that consumers may have entered home loans beyond their ability to pay.
“If banks are going to accept referrals of consumers seeking a home loan from unlicensed individuals, who receive commission payments for the referrals, they need to make sure they have the right systems in place to properly process those referrals,” Ms Court said.
The regulator has also alleged between November 2015 to June 2020, ANZ breached its general conduct obligations as an Australian Credit Licence holder by failing to take reasonable steps to ensure its representatives did not conduct business with unlicensed third parties and thereby failed to engage in credit activities efficiently, honestly and fairly.
The regulator has sought declarations, pecuniary penalties and other orders, including for ANZ to engage an independent expert to conduct a review of ANZ’s existing home loan customer referral arrangements.
ANZ has responded to the lawsuit, stating it co-operated with ASIC during its investigation and established a customer remediation program, alongside working on its home loan processes and controls.
A date is yet to be determined by the court.
[Related: Westpac slammed by RBNZ, independent review]
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