ANZ has been penalised $10 million by the Federal Court in relation to its Home Loan Introducer Program, according to an announcement released by the Australian Securities and Investments Commission (ASIC) on Friday.
The court found that between March 2017 and March 2018, ANZ contravened consumer credit protection laws by accepting information and documents in support of 50 home loan applications from unlicensed third parties who were not licensed to engage in credit activity.
It also found that between November 2015 to March 2018, ANZ did not have adequate processes in place in the program to ensure compliance and failed to take reasonable steps to ensure ANZ’s representatives complied with consumer credit protection laws.
ASIC explained that the program involved home loan referrals to the bank from third-party “introducers” from various professions including cleaners and real estate agents.
“Under consumer protection laws, ANZ’s introducer program should have only accepted names and contact details for customers from unlicensed third parties,” commented ASIC deputy chair Sarah Court.
“Instead, ANZ was sent sensitive information by unlicensed intermediaries, including pay slips and copies of identification documents. In some cases, these documents were fraudulent.”
ANZ admitted the contraventions and agreed to conduct a review of its policies and procedures surrounding the program to ensure ongoing compliance with credit legislation. The bank has also been ordered to pay ASIC’s costs.
“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,” said Ms Court.
ASIC noted that introducer programs received considerable criticism in the Financial Services Royal Commission for exposing consumers to an additional layer of risk by insulating the lender from what the intermediary does with the borrower.
Previously, NAB was forced to pay a $15-million penalty in October 2020 for dealing with unlicensed home loan introducers.
Earlier, former NAB branch manager Mathew Alwan was sentenced to 12 months’ imprisonment in November 2019 to be served by way of Intensive Corrections Order for making false and misleading statements to NAB in relation to 24 home loan applications.