ASIC vs Westpac: RAMS Financial Group sued by regulator over home loan misconduct

The financial regulator will take mortgage company RAMS, a wholly-owned subsidiary of Westpac, to court for “systemic misconduct” in arranging home loans, including doctoring payslips and expenses.
The Australian Securities and Investment Commission (ASIC) alleges RAMS breached its obligations as a lender, failing to perform proper oversight of franchisees from June 2019 and April 2023, resulting in “widespread misconduct”.
ASIC alleges RAMS’ franchisees submitted false pay slips from non-existent employers and altered customers’ liabilities and expenses to enable them to meet loan serviceability requirements. In another example, a RAMS franchise employee was found to be involved in manufacturing a fake contract of sale for a home.
Sign up to The Nightly's newsletters.
Get the first look at the digital newspaper, curated daily stories and breaking headlines delivered to your inbox.
By continuing you agree to our Terms and Privacy Policy.“This is a systemic organisational governance failure by RAMS, who did not adequately supervise its franchise network,” ASIC Deputy Chair Sarah Court said.
“RAMS allowed years of unlawful conduct to occur across its franchises, creating the opportunity for loans to be provided to customers who otherwise may not have qualified for those loans, and thereby increasing commissions earned by RAMS franchisees.”
RAMS, founded 33 years ago, became one of the most prominent non-bank lenders and was instrumental in shaking up the banks’ stranglehold on the mortgage market.
The company was purchased by Westpac in 2008, when it hit financial pressure during the Global Financial Crisis.
Westpac had tried to offload the company but the investigation by ASIC, launched in May 2024, scuppered those plans.
In August 2024, Westpac closed the RAMS business, including shutting down all franchisee offices, absorbing the $31.8 billion mortgage book.
RAMS has admitted liability for contravening the Credit Act, and completed a remediation program.
Westpac said it would work cooperatively with ASIC to resolve the proceedings and “expects existing provisions should be sufficient to meet the financial outcome of the proceedings, subject to court approval.”
ASIC is seeking “pecuniary penalties”, with the first hearing yet to be scheduled.