The Federal Court has ordered RAMS Financial Group to pay a $20 million penalty after admitting to widespread compliance failures in the way it arranged home loans, the Australian Securities and Investments Commission (ASIC) reported.
The court found RAMS had breached its obligations under the National Consumer Credit Protection Act (Credit Act), failing to meet key standards expected of an Australian Credit Licensee.
RAMS, a wholly owned subsidiary of Westpac Banking Corporation, operated as a standalone business within the Westpac Group through a franchise network of independent franchisees and their staff, offering RAMS-branded home loans primarily to first-home buyers and self-employed borrowers.
Between June 2019 and April 2023, RAMS was found to have:
RAMS also failed to implement effective controls to address misconduct uncovered internally, including franchise staff submitting false pay slips from non-existent employers and altering customers’ financial details to ensure loan approvals.
Justice Yaseen Shariff described the breaches as serious and damaging to consumer trust.
The judgment found that RAMS’ conduct exposed consumers to financial harm by allowing unsuitable loans to proceed.
“I am satisfied that [RAMS’] contravening conduct exposed consumers to a risk of loss… as a consequence of those defaults,” Shariff said.
Westpac explored selling the RAMS business in early 2024 but ended the process in April, later deciding to wind down the business entirely. The RAMS franchise network was closed by August 2024, though Westpac and RAMS continue to support existing home loan customers.
On June 4, ASIC commenced legal proceedings against RAMS for systemic misconduct in arranging home loans. RAMS admitted liability and remediated customers who suffered detriment as a result.
ASIC said the outcome sends a clear message that lenders must maintain strong governance and risk frameworks to protect consumers.
“Financial entities must adhere to their obligations under the law and consumers must be protected from lending practices which can expose them to harm,” ASIC Deputy Chair Sarah Court (pictured) said in a media release.
“ASIC will continue to scrutinise those involved in the whole home lending process and will hold financial institutions accountable for misconduct.”
ASIC noted that consumers seeking guidance on choosing or managing home loans can access resources through its Moneysmart website.
For brokers and aggregators, the ruling underscores the importance of robust compliance systems, particularly around referral arrangements, conflict management, and verification processes. Regulators are maintaining intense scrutiny of the home lending sector, with ASIC signalling further enforcement where misconduct threatens borrower outcomes.
Brokers should ensure that all referral partners are properly licensed, that income and expense verification procedures are watertight, and that credit assessments genuinely reflect customer circumstances.
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