ASIC Sues Westpac’s RAMS Over Fraudulent Loan Practices

Australia’s corporate watchdog, the Australian Securities and Investments Commission (ASIC), has filed a civil lawsuit against Westpac’s former mortgage broking arm, RAMS Financial Group, over widespread misconduct involving falsified loan documents. According to court filings, RAMS used fake payslips and employment records to approve home loans between June 2019 and April 2023.

The lawsuit alleges RAMS, which Westpac shut down for new loans in 2024, engaged in unlicensed mortgage activity and failed to supervise its franchisees properly. In some cases, the source of forged documents is unclear, but ASIC claims that RAMS franchisees or their employees knowingly submitted fraudulent loan applications to increase their commissions.

ASIC Deputy Chair Sarah Court stated the misconduct allowed loans to be approved for customers who would not have otherwise qualified. The regulator is seeking financial penalties, though specific amounts were not disclosed.

Westpac, Australia’s second-largest lender, acknowledged the allegations and said it will cooperate fully to resolve the case. The bank believes its current legal provisions are sufficient to cover potential penalties. While Westpac retains RAMS’ existing loan portfolio, the closure of new loan operations has sparked a class action from RAMS franchisees. They argue that Westpac’s decision to shut the unit down unfairly impacted viable businesses and that the bank, not the franchisees, should be held accountable for loan processing failures.

A franchisee spokesperson criticized the investigation, claiming franchisees were not consulted and that Westpac is shifting blame for its governance and oversight failures. The court has yet to schedule the first hearing in the ASIC vs. Westpac case.

This case follows tighter regulations after the 2019 Royal Commission exposed widespread lending malpractice in Australia’s financial sector.