Headlines in the broker space are increasingly filled with tales of scammers, spruikers and fraudsters, but how can brokers protect themselves and what can ASIC do to help them?
On this week's Australian Broker News Brett Bassett, Senior Executive Leader of ASIC lends his insights.
Video transcript below:
Anna Temple: Headlines in the broker space are increasingly filled with tales of scammers, spruikers and fraudsters, but how can brokers protect themselves and what can ASIC do to help them. The big problem for them is the sophistication of the way these fraudsters create an air of legitimacy.
Brett Bassett: The sophistication of some of these fraudsters or scammers, they for all intents and purposes have the legitimacy of an Australian credit licensee and Australian Financial Services licensee or an authorised credit representative. They use scripts that give them the air of legitimacy, the websites that they use are often very very sophisticated and the terminology they use may lead people who are not necessarily dealing with that type of person on the value basis to believe that they are in fact legitimate when in fact they are not. So the ability for them to pose as somebody that they actually aren’t really does limit our ability to take action in some instances.
Well a recent example where we issued a public warning notice was where a legitimate Australian credit licensee had a number of credit representatives, authorised credit representatives and in effect we saw a scam where the licensee and the authorised credit representatives, their identities were basically stolen, put on to a false website, so that’s a clear example where you have got the mortgage brokers who are really the target to some extent of some scams.
Anna Temple: Bassett’s advice to brokers aside from watching out for over spruiking or unsolicited cold calling, is to be vigilant about your own online presence and to encourage clients to always verify their broker’s qualifications and licenses.
Brett Bassett: As a broker the first thing I would do, is I would make sure that I keep across the internet to see whether or not my identity is being stolen. It’s somewhat easy to do that in this day and age. So one tip for a broker is always be careful with your identity, check the internet on a regular basis to see if your name does appear on anybody else’s websites, for example and another tip that I would, if I am a broker and this comes into the way that they engage with their clients, is be upfront with their clients. Talk to them about the fact that they are an authorised rep or for example they might be an Australian credit licensee, have that information, point their clients to the avenues that are available to check, so ASIC connect for example and other registers held by ASIC are a classic example of making sure that they are not afraid to direct their client to check for the veracity of who they are.
Anna Temple: However Bassett does admit that ASIC’s powers to protect the Australian mortgage industry are very limited by issues of jurisdiction. Despite the many threats from foreign soil, he says there’s not a lot ASIC can do if the scammers are working from outside Australia.
Brett Bassett: Depending on where the scam arises will depend on how we actually take action, if any. A lot of these scams do arise overseas, in other jurisdiction and as a result it makes it difficult for us to take action overseas in those jurisdictions. When a scam does arise or does take place within Australia, we have a range of regulatory tools including public warning notices and consumer alerts that we do use from time to time.
Anna Temple: This is Anna Temple reporting for Australian Broker Online.