Banks encouraged fraud, claims broker

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A former WA broker who is facing fraud charges has claimed banks actively encouraged fraud during credit boom times to get low doc loans approved, sending emails to brokers with 'tips'.

 
Kate Thompson told the ABC last night the banks "are corrupt. They are protecting each other."
 
She said banks would email brokers with tips on how to sidestep regulations, which often involved fraudulently inflating the income of applicants.
 
"I would get upfront commission.  I would get a trailing commission. I was probably earning about $5 million a year. It was great. It was wonderful. But it was all a lie," she said.
 
The issue of low doc fraud is in the spotlight this week, as a recent senate inquiry unearthed claims of unethical behaviour in Australia's financial industry.
 
Denise Brailey, from the Banking and Finance Consumers Support Association, told the senate she had hard evidence of fraudulent activity on the part of brokers and banks.
 
"I received 4,000 emails, and in those emails from the banks to the brokers you'd see clearly bank officers instructing the brokers how to have no-loan mortgage insurance, no income necessary, no assets and liability, virtually just get a signature on a document, send it in and we'll give this person, no matter what their income or affordability criteria is, give them a $500,000 loan," she said.
 
 
 

 

  • Richard on 7/01/2013 10:15:29 AM

    Where are the statistics to back up your assertions Macca?
    I have been a broker for 12 years, never lodging a falsified loan. I do concede that I have have seen several high flyers taken down for fraudulent behaviour.
    Most brokers do not make a lot of money, but they are able to sleep well at night.
    There are crooks in every industry, but I suggest that Broking is much cleaner for all the infuriating new rules we have to follow because of the few that have done so much damage.
    Dishonest brokers need dishonest clients to succeed.

  • Macca on 7/01/2013 1:33:17 AM

    It is finally near that the bubble of deceipt and corruption is about to burst. If you are by chance one of the few decent people in this disgusting industry of Banking and Broking do yourself a favour and contact Denise Brailey with your story. It certainly appears that many of you in the industry by the comments posted on here are either blind to the truth or too crooked to be honest. The Banking and Finance industry in this country are rotten to the core and yes I can validate my case I hold all the dirty paperwork and know the dirty system. So save your souls and come clean if you are aware of the FRAUD taking place at least you will sleep at night not having to think about how many of your actions have thown honest decent people into the street.

  • John W. on 28/08/2012 2:10:37 PM

    Andy - I take it that you are a banker - your personal attacks on me when I pride myself on my integrity- are just another tactic that people like you use to try & stop the TRUTH from coming out. The FACTS are that BANKS are still profiting from FRAUD, AND THEY ARE ALSO SHIFTING THAT BLAME ONTO THE BROKERS ! They have put this blame onto the brokers- IN WRITING- now that they have been caught out. Brokers are already becoming the fall guys. I would urge that if any Brokers know of this happening, to contact the bfcsa & speak to Denise Brailey, in confidence.

  • Andy on 17/08/2012 5:00:52 PM

    John W - whilst no-one will argue that a situation like what you have described(if correct)is TOTALLY wrong. But what about your contribution in the process ? You never once thought about how you were going to make the repayments ?? Never even posed the question to the Broker as to how he was going to get finance for you when you were unemployed ? I'm willing to bet you were pretty happy when you got your approval ! Take some responsibility for your own actions. Another classic example of pathetic people wanting to blame someone/anyone else.

  • John W. on 17/08/2012 2:20:06 PM

    The banks ARE CERTAINLY involved in this - on a regular basis. After 3 long years of trying to get the Bank to give us copies of our loan Documents, we now have the documentary proof of their fraudulent ways.
    We found out that they grossly falsified our documents AFTER we had signed blank documents. They were falsified by the bank or the broker. The Bank KNEW that they were false but deliberately chose not to verify any of the financial information as the loans would have been refused.
    I was UNEMPLOYED, with NO INCOME, we were on Family Benefit, yet they still approved a loan for nearly $400,000.
    The banks are totally corrupt - they are destroying the lives of decent hard working Australians and must not be allowed to profit from their fraudulent ways.

  • anonymous !! on 15/08/2012 6:40:57 PM

    I personally witnessed the fraud. I had just started my broking career at the time and was both green and naive.. Income statements were forged routinely for years ,often signed on windows, banks knew and didnt care. We once ran a loan with income docs that were so obviously faked (unsigned and mis-signed) that the bank rang us back and said "look fix them up".. we did.. loan got approved !! Many aggregators were teaching brokers how to lodge loans using fake documents and these aggregators had insiders in each of the banks. I know first hand. i quit my career in utter disgust as a result actually. Very powerful people are involved !! i was pushed out for not playing ball as i would not run a dodgy loan. Banks stopped approving my loans altogether as my aggregator realised i was not one of them. In other words if you didn't lodge dodgy loans the banks wouldn't deal with you in my region. They did this so no one would ever "talk". Every single broker i knew was running these dodgy loans. ALL OF THEM !!! and the banks and certain aggregators had full knowledge and participation. We even ranked each bank for which was most likely to approve a dodgy loan.. citibank came out on top as el dodgo kings.. westpac was most conservative we found although even westpac approved many dodgy loans for select clients. The whole industry is a shemozzle. I remain heartbroken to this day that i lost a treasured career purely because i was not willing to forge documents and i never once ran a lo doc loan ever. all my loans were legit... banks didnt like that fact !! as i say they stopped approving my loans altogether or simply stalling them for 3 months so my clients would get mad at me. this was happening in certain regions and may not be the case australia wide. but it was most certainly the case in my region.

  • anonymous !! on 15/08/2012 6:24:39 PM

    I worked as a broker during this period and I WAS with the elite bunch. I can promise you that the banks are all involved in corrupt loans. My own aggregator taught me how to lodge a dodgy loan using falsified income statements. A senior broker who has also earnt millions for himself was openly known to get anyone any size loan for a price. The price included $1000 for falsified income statements which i personally witnessed being signed on windows and completely falsified to get "certain" select customers great loans. Others were tricked into taking loans then lost their assets altogether. Some sexy young ladies provided sexual favors in returns for these loans !!! The banks and many of the aggregators were 100% privvy and directly involved in running these loans without question. I quit the industry in utter disgust many years ago.

  • Wayne on 15/08/2012 11:57:19 AM

    Even if Lenders did do what this lady said they did, all that is is the opportunity to do the wrong thing. She still made the choice to rort the system, put herself out there as an “investment expert”, put vulnerable, gullible people into impending hardship and profited greatly from it. So typical of our society. Always looking to shift the blame to someone else.

  • retired broker on 15/08/2012 10:42:43 AM

    When greed takes over, moral values fly out of minds window. Fear of losing the top award coupled with greed must have produced the challenges she is facing.In every venture we must control both fear and greed ın order to manage risks. It appears she has not managed the risk at all. Shifting the blame is not the solution.It is a sign of great stress.There ıs a saying GOD HELPS THOSE WHO ARE HELPING THEMSELVES. In this instance the saying must be altered to read:-May God help those who are caught helping themselves.

  • Not receiving those emails either on 14/08/2012 12:01:11 PM

    I wish Kate the best of luck with that. Of course since her claim is that it was by email rather than a phone conversation she can produce the emails in question. How is it thtat this is news worthy without producing the emails. Please let's look at what is news rather than last ditch fabrications from a desperate lady.

  • Bdm on 14/08/2012 11:17:00 AM

    I worked for several banks and do not recall ever advising a broker to fraudulently complete a loan application. If I had I very much doubt the broker would have dealt with me again! In my experience broker's are go to great lengths to protect thier reputation and brand. It is after all thier livelihood.

  • Industry Bystander on 14/08/2012 11:03:08 AM

    Once again this is Kate Thompson telling lie after lie to try and save herself from jail. Amazing how she can do this interview after telling the courts just three weeks ago that she was not competent to stand trial and had to have a psych evaluation done. $5M... what a load of rubbish. This was and still is a dangerous woman that will do and say anything to push the blame for her bad behaviour onto others.

  • Craig on 14/08/2012 10:35:13 AM

    I saw the interview and what a beat up!!! She is obviously trying to save herself. I worked for a major bank for 20yrs and been broking now for 7yrs and NEVER was I 'told' to LIE.S he is kidding herself if earning $5m a year is a reason to do this. Where is her commonsense and morals. She is why this industry gets a bad name at times.

  • Stephen Dinte on 14/08/2012 10:16:22 AM

    What a surprise!! Your story leaves out the fact that Kate Thompson was "Broker of the Year" in 2007. Makes a mockery of such awards which are given to the person with the largest volume. If she did earn $5m a year, then she must have had a gigantic volume. With a 1% UFC, Ms Thompson must have settled some $500m in loans. No one person alone could possibly do that volume in 12 months, unless she is "Wonder Woman" in disguise.
    Fortunately, the NCCP will stop this behaviour, or will it??

  • Dave on 14/08/2012 10:07:36 AM

    Funny, I've been a broker for 12 years & I never received emails on how to defraud the system...I mustn't be one of the elite group of people called CRIMINALS!!! Talk about trying to make her actions justified.

  • Will on 14/08/2012 9:54:48 AM

    What a media beat up. I neevr ever experienecd ANY lender asking a broker to push the envelope on a low doc. I think the woman at the centre of this is just trying to save herself.

  • Peter Wood on 14/08/2012 9:54:15 AM

    I worked for a very well known non bank lender who kept telling me to just put the loan on the books. This included selling no doc loans to pensioners.The crazy thing is that this group of customers met all credit criteria.

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