Fraud a 'continuing' trend in broking: ASIC

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Fraudsters cost Australia a whopping $372.7 million last year alone - and ASIC says the issue is a serious one within the mortgage broking industry.

ASIC spokesperson, Daniel Wright, says the organisation is seeing a ‘continuing’ trend of fraud within the mortgage broking industry and says it’s the category of misconduct involving brokers that is, in fact, most regularly reported to ASIC.

ASIC is particularly concerned with instances where persons have engaged in fraud or other misconduct relating to information provided in loan applications. Since the commencement of the NCCP, ASIC has banned six persons from engaging in credit activities for such conduct and has 18 other current investigations. ASIC has also secured criminal charges against one finance broker under the responsible lending provisions of the NCCP.”

But MFAA CEO, Phil Naylor, argues that fraud remains a relative rarity in the mortgage broking industry, accouning for less than a handful of finance industry cases.


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  • Ralph Rintoule on 11/02/2013 4:22:18 PM

    When you have proof of a fraudulent case nobody & I mean none of the organisations & association want to do anything about it

  • Terry on 11/02/2013 3:42:06 PM

    what about the branch land goons, not just brokers. I smell a cover up here.

  • Maria Rigoni on 11/02/2013 12:22:56 PM

    When the term "mortgage broker" is being used are the accusers referring to accredited loans writers or mortgage managers or both?
    Is this an agenda to justify getting rid of the third party channels?
    Who is making all these reports to ASIC? Do they have any experience in the application and approval process?
    How is the fraud costing Australia $327.7 million? Is that the cost of ASIC investigations?
    Due to market dominance of a few players in the mortgage industry there is an imbalance of power between lenders and responsible borrowers... affordable loans for the average borrower maybe getting to hard to get approved as the big boys only want "vanilla" clients on their books.

  • Mike C on 11/02/2013 11:11:34 AM

    " Finance, perhaps unsurprisingly, boasts the highest fraud rate of any industry in Australia, according to KPMG’s 2013 Survey of Fraud, Bribery and Corruption in Australia and New Zealand. The report found that the financial services industry accounted for 86% of all fraud in Australia and New Zealand in 2012. Twenty-five per cent of fraudsters came from outside the company they victimised."

    So do we then assume that 75% is 'internal' by nature? Having spent 34 years in this industry I can assure you that incidents of fraud are not just solely related to the 'brokers' . I would like to see the current incidents occurring from within the actual lending institutions. A strong sales & target focussed environment/culture could also lead to higher rates of fraud. Fraud or even 'loose' lending practices may not just be initially committed by officers of financial lending institutions for upfront personal monetary gain, it may be to simply ensure unrealistic targets are met?

  • Wishful Thinking on 11/02/2013 9:03:12 AM

    There is a lot more fraud in the finance industry then the MFAA is aware of. It is a fact that the funders do not make this information readily available, and prosecutions are limited due to the time and expense involved. Everyone needs to stop dancing around this issue and report all such matters to ASIC, who are the governing body, NOT the MFAA.

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