'Dishonest conduct more common in brokers than lenders': ASIC

by 25 Oct 2013

ASIC has pointed the finger at mortgage brokers in its defence against Banking and Finance Consumers Support Association (BFCSA) allegations of loan fraud in its latest submission for the Senate Inquiry into the watchdog's performance.

BFCSA head, Denise Brailey has been at the forefront of an on-going steam of accusations and claims ASIC has failed to investigate ‘hundreds’ of cases of loan fraud and subsequently covered up a ‘systematic banking failure’.

However, in its submission on reforms to the credit industry and low doc loans, ASIC says that, while it’s received more than 150 letters from BFCSA members alleging widespread misconduct by lenders in relation to falsifying low doc loan application forms, the evidence doesn’t stack up.

“Almost all of the loans that BFCSA members have raised concerns about were entered into before the [NCCP Act] commenced, with most of the loans issued between 2004 and 2008. Where the borrower has provided details on the purpose of the loan, just over half were for investment or business purposes and as such were not regulated under the state and territory credit laws,” reads the submission.

Furthermore, the regulator claims that allegations of loan fraud is more commonly initiated by unscrupulous mortgage brokers – not lenders.

“Consistent with ASIC’s more recent experience under the NCCP Act, it appears that dishonest or fraudulent conduct has been more commonly found in relation to mortgage and finance brokers, rather than lenders.”  

The submission comes as ASIC continues to dodge accusations over its failure to prosecute the Leighton Holdings bribery scandal and the CBA financial planners and Securency issues.

A date for Senate hearings is yet to be set.


  • by Birsbane Broker 25/10/2013 9:35:59 AM

    Denise Bailey is a loony. I hope the senate never takes her seriously.

  • by ozboy 25/10/2013 9:45:45 AM

    Not sure I understand why ASIC would mention NCCP. Fraud is fraud no matter what year it is carried out. Did they check if these loans were actually used for those purposes or was the box ticked by someone else...just like the income figure?

    Would love to know how ASIC justify's the statement starting "Consistent with ASIC's more recent", some further information to justify this claim would be great.

    I understand ASIC is probably on the back foot a little here and more than happy for them to do what is necessary to "clean up" the bad apples but just like we have to do I would love to see some transparency around their operations with figures released of how many people were investigated from which sections of the finance industry and the term "broker" seems to relate to many many many people who I am sure some of us as well as our associations would not regard as brokers.

  • by Keith of the West 25/10/2013 9:54:47 AM

    What an irresponsible news article!. In another life I managed sales personnal as a Senior Team Leader in a major bank, and it never used to cease to amaze me some of the dishonest behaviour conducted by bank staff, under pressure of course set targets almost humanly impossible to achieve. In one case, an individual lowered the computer calculated tax rates in order to get deals approved. This like so many buried by big corporation without knowledge to the external regulators