The Australia and New Zealand Banking Group Limited (ANZ)—Australia’s fourth-biggest bank and the country’s seventh-biggest publicly-traded company—has been fined $10 million over its home loan introducer program.
The introducer program involved home loan referrals to ANZ from third party ‘introducers’ from various professions, including cleaners and real estate agents.
Australian Securities and Investments Commission deputy chair Sarah Court said under consumer protection laws, ANZ’s introducer program should only have accepted names and contact details for customers from unlicensed third parties.
“Instead ANZ was sent sensitive information by unlicensed intermediaries, including pay slips and copies of identification documents. In some cases these documents were fraudulent,” Court said in a prepared statement.
The Federal Court found that in the 12 months to March of 2018, ANZ contravened consumer credit protection laws by accepting information and documents in support of 50 home loan applications from unlicenced third parties who were not licensed to engage in credit activity.
The court also found that between November 2015 to March 2018, ANZ did not have adequate processes in place in its introducer program to ensure compliance and failed to take reasonable steps to ensure ANZ’s representatives complied with consumer credit protection laws.
“By failing to have robust compliance and training processes in place, ANZ made it possible for third party intermediaries to misrepresent consumers’ financial details in order to receive commissions on loans approved based on possibly misleading information,” deputy chair Court said.
ASIC said ANZ had admitted the contraventions and had agreed to conduct a review of its policies and procedures around the program to ensure ongoing compliance with credit legislation.
ANZ has also been ordered to pay ASIC’s costs.
ANZ consented to the orders being made and the parties made joint submissions on liability and penalty.
Introducer programs, by which unlicensed third parties can refer customers to banks for loans, was heavily criticised in the two-year-long Financial Services Royal Commission, which found the program had exposed consumers to additional risk by insulating the lender from what the intermediary does with the borrower.
In October 2020, National Australia Bank (NAB) paid a $15 million penalty for dealing with unlicenced home loan introducers.
Eleven months earlier, in November 2019, former Western Sydney NAB branch manager Mathew Alwan was sentenced to 12 months’ imprisonment—served by way of intensive corrections order—for making false and misleading statements to NAB in relation to 24 home loan applications.
