ASIC is suing the Westpac-owned RAMS Financial Group, alleging widespread misconduct by franchisees and staff.
The regulator alleges RAMS breached its obligations as an Australian Credit Licensee and engaged in widespread unlicensed conduct between June 2019 and April 2023.
RAMS, a wholly owned subsidiary of Westpac Banking Corporation, admits that it conducted business with unlicensed persons, 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, ‘This is a systemic organisational governance failure by RAMS who did not 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.”
False pay slips submitted to ensure home loan success
Court said staff submitted false pay slips from non-existent employers and altered customers’ liabilities and expenses to ensure home loan applications would be accepted. One franchise employee even produced a fake contract of sale, Court said.
ASIC alleges RAMS dealt with unlicensed referrers, failed to ensure customers were not disadvantaged by possible conflicts of interest, did not supervise representatives to ensure credit law compliance, and failed to ensure its credit activities were dealt with efficiently, honestly and fairly.
A statement from Westpac said the RAMS group “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.”
ASIC is seeking declarations and pecuniary penalties against RAMS.
The date for the first case management hearing is yet to be scheduled.
The RAMS Financial Group conducted a remediation program, following the ASIC investigations, and closed the RAMS business to new home loan applications from 6 August 2024.
