Westpac’s mortgage broking arm, RAMS, is facing legal action from the Australian Securities and Investments Commission (ASIC) over allegations of “systemic misconduct” in home loan arrangements. The regulator claims RAMS staff fabricated pay slips and manipulated financial details to approve loan applications that should not have qualified.
ASIC’s accusations indicate that RAMS infringed upon its obligations as an Australian Credit Licensee, engaging in widespread unlicensed activities from June 2019 through April 2023. The firm has acknowledged operating with unlicensed individuals, inadequate supervision of its representatives, and lacking robust policies and procedures.
ASIC’s Deputy Chair, Sarah Court, emphasized the “systematic organisational governance failure” at RAMS, stating that the company allowed unlawful practices to persist across its franchises. As a result, loans were issued to clients who may not have been eligible, resulting in increased commissions for RAMS franchisees.
The regulatory agency is pursuing penalties against RAMS, which operated as a standalone entity within Westpac, using a network of independent franchisees to distribute RAMS-branded home loans, all backed by Westpac. RAMS was established in 1991 and acquired by Westpac for $140 million in 2007. However, in August 2024, Westpac announced it would terminate RAMS’ operations, including all franchise offices, and absorb its $31.8 billion loan portfolio into its balance sheet.
While RAMS has admitted its wrongdoings and taken steps to remediate affected customers, Westpac has stated its commitment to work closely with ASIC to resolve the legal proceedings swiftly.
