​Fraudulent brokers in ASIC’s crosshairs

by Amy Rosenfeld12 Dec 2013
Following a slew of permanent bans and convictions against brokers announced yesterday, ASIC has sent a strong message to “rogue operators” in the industry.

ASIC has revealed it is currently investigating 20 cases of falsification of loan documents or applications, while stating that fraud by brokers "will not be tolerated".

Australian Broker reported yesterday that ASIC has permanently banned two Sydney-based brokers and one former mortgage broker while announcing the conviction of another.

The announcements were released in quick succession by ASIC, and all related to falsification of loan documents or applications.

An ASIC spokesperson told Australian Broker the regulatory body has “identified significant falsification of loan documentation by mortgage and finance brokers” through reports from AUSTRAC, lenders, industry bodies and consumers.

ASIC has been “very active” in investigating matters of this kind, said the spokesperson.

There are currently 20 cases under investigation by ASIC relating to falsification of loan documents or applications.

“Two of them involve large, ongoing, systematic conduct,” said ASIC. “The remainder appear to involve falsification of documents on a smaller number of transactions motivated by self-benefit."

ASIC was quick to acknowledge these cases are not representative of the broking industry as a whole.

“The spike in action we have taken does not suggest the industry is faltering. However, it should act as a reminder to everyone that there are still rogue operators out there who, contrary to the majority, don’t have the interests of the consumer or the industry front-of-mind.

“ASIC will take enforcement action where brokers engage in fraud or other misconduct regarding information provided in loan applications. This is clearly in the interest of all reputable brokers, as well as lenders and consumers.”

ASIC took over the regulation of consumer credit on 1 July 2010 under the National Credit Act. Prior to this, consumer credit was primarily regulated by the states and territories under the Uniform Consumer Credit Code (UCCC).

“Since the start of the National Credit Act, ASIC has been actively regulating the mortgage broking industry. Our aim is to raise standards and increase consumer confidence, and where possible to work with the industry to drive out poor practices,” said ASIC.

“The new legislation is there to protect consumers. At the end of the day, we expect brokers to operate with honesty and integrity, and in accordance with their responsibilities.

“If brokers break the law, they will hear from us. In particular, fraud by brokers will not be tolerated.


  • by Dave Robinson 12/12/2013 9:00:26 AM

    Great this is what we want/need from our regulator. Well done. Any news on ASIC tackling the fraud conducted through lenders and their branches and any news on how ASIC is being proactive in this area as the above only points to being reactive (refer comment "through reports from AUSTRAC, lenders, industry bodies and consumers").

  • by Regional Broker 12/12/2013 9:11:18 AM

    This sis great news , lets get rid of the rouge elements in our industry . Big news for ASIC they are doing what they need to do at last.

    When we think about this it is also good news for the industry , 20 brokers out of 11,000 plus is a very low number , not an excuse for these rouges , just an observation.

  • by GC 12/12/2013 10:34:40 AM

    Over the years it has been obvious the majority of fraud (for want of a better word) has been conducted through the banks and NOT via the broker chanel. Brokers are for the most part, honest as its our livelihood at stake so its in our interest to fiercely protect it and be honest. I am not sure why ASIC think we should be in their "crosshairs". In fact the fraud issues are discovered by the lenders and NOT ASIC so ASIC shouldnt be accepting the so called accolades for catching these idiots. It time ASIC focused their attention on the bigger problem - the banks own staff. If they are to clean up the undustry they really need to start with the banks.
    I am all for eliminating the rubbish from the industry but it the eye must be cast over the entire industry and not just half because its easier.