Urgent Warning for RAMS Clients: Know the Risks and Why You Need a Loan Review Now
The mortgage industry’s future is under scrutiny after ASIC’s crackdown on RAMS Financial Group — revealing systemic misconduct that puts thousands of borrowers at serious risk. If you secured a home loan through RAMS between 2019 and 2023, your financial safety could be compromised, and immediate action is essential.
What’s the Risk?
ASIC’s revelations expose shocking failures: franchisees using fake pay slips and altered contracts, unlicensed referrers completing loan sections, and breaches of credit laws — all behaviours that threaten the integrity of your loan and financial security. The misconduct isn’t just about a rogue few; it exposes holes in franchise oversight, leaving borrowers vulnerable to fraud and mismanagement.
Why You Must Contact Mates Rates Mortgage Brokers Immediately
The Bottom Line
The RAMS scandal exposes a broader industry risk: franchise oversight flaws, unlicensed activities, and rising AI misuse threaten borrower security nationwide. The best way to protect yourself? Get a professional loan review today with Mates Rates Mortgage Brokers. Stay informed, stay safe, and secure your financial future.
Contact us now — your peace of mind is worth it.
REFERENCE ARTICLE
The Australian Securities and Investments Commission’s (ASIC) civil penalty proceedings against RAMS Financial Group for alleged broad-based regulatory violations in its home loan department has raised questions about the future of mortgage broking industry regulations. Brokers and franchisees alike are now under the spotlight, as regulators zero in on compliance failures, oversight gaps and the role of unlicensed referrers in the loan origination process.
Early Wednesday morning, ASIC began Federal criminal proceedings against RAMS — a wholly-owned subsidiary of Westpac Banking Corporation — claiming that the mortgage brokerage had engaged in widespread misconduct, including “systemic misconduct in arranging home loans.”
Between June 2019 and April 2023, several RAMS franchisees allegedly breached their obligations under Australian credit licence laws by using fraudulent documents, including falsified pay slips and altered loan contracts, to secure home loans for ineligible borrowers. The Australian watchdog group stated that these actions raise serious concerns about the underlying practices and motivations within RAMS’ loan origination processes.
“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,” said ASIC Deputy Chair Sarah Court.
The alleged failures include engaging in business with unlicensed individuals, falsifying documents such as pay slips and expense records to help customers qualify for loans, breaching credit legislation, failing to properly supervise representatives and ensure their compliance with regulatory requirements, and lacking adequate policies and procedures to safeguard borrowers. Each of these actions constitutes a breach of the National Consumer Credit Protection Act 2009, ASIC said.
Westpac could not immediately be reached for comment.
The major closed up shop of all RAMS businesses, including franchise offices, in August of last year. The nearly $32 billion of existing RAMS loans were absorbed by Westpac’s loan book. Before closing, RAMS operated as a standalone business under an independent franchisee model, providing credit services for RAMS-branded home loans, which were funded by Westpac. The mortgage brokerage — which held an ACL authorizing it to perform non-credit providing functions, including credit assistance provider — offered services for first-time buyers and self-employed borrowers.
RAMS has admitted to the breaches and, according to ASIC, has taken steps to compensate affected borrowers. However, the implications of the case reach well beyond the company itself.
Franchisee oversight: a systemic risk?
The case exposes vulnerabilities in the mortgage broking model, particularly the potential for inconsistent oversight of franchise models. While RAMS operated under the broader Westpac umbrella, the misconduct largely originated at the franchisee level. For brokers working within similar frameworks, this case underscores the urgent need for clearer, enforceable standards around compliance and quality control. It also raises a critical question: should brokers and mortgage professionals now prepare for increased regulatory scrutiny in the wake of these revelations?
Phil Rice, a finance expert and certified broker coach, disagreed with the notion that the RAMS case signals a broader industry issue.
“This is not a systemic risk,” Rice told Australian Broker. “There’s always going to be a bad egg somewhere who’ll try the system. And that’s going to be with any industry. No one can help that. So all brokers can’t be held liable for one bad egg.”
He emphasized that the broking profession is subject to rigorous oversight and structured support.
“Brokers are mentored for the first two years; there’s always someone looking over their shoulder. Brokers are held at a very high standard of trust. There’s too many checks and balances in place in this industry. Brokers are over compliant,” he said.
Rice also noted that the full extent of involvement among franchise brokers remains unclear, arguing that the industry as a whole should not be penalized for the actions of a small number of individuals.
The recent proceedings have also drawn attention to the use of unlicensed referrers and the emerging risks associated with technology, particularly artificial intelligence, in the home loan application process. In the case of RAMS, ASIC stated that some unlicensed third parties were not only sourcing leads, but also completing sections of loan applications. Under current legislation, only individuals who hold a credit licence or are authorised representatives are permitted to perform credit activities.
Phil Rice noted that brokers are not always the source of misleading documentation, highlighting that at times borrowers provide falsified records.
“You can’t discount that,” he said. “There are times when brokers get pay slips or bank statements from the consumer, thinking that they’re the right ones. And the broker just passes it on to the bank. And the broker’s done their job, right? But then the bank finds out [it’s a fake document] because the bank has their own checks and balances.”
The growing use of AI in lending also raises concerns about future complications.
In 2024, during his remarks at the University of Technology Sydney’s “Shaping Our Future Symposium,” ASIC Chair Joe Longo addressed the potential risks of using AI to outsource and gather data across industries, including home loans and mortgages..
While he dispelled the notion that artificial intelligence is not currently regulated — “It is,” he said, during the address — he also questioned whether the existing regulations that govern responsible outsourcing are enough.
“The open question here is how regulation can adapt,” Longo said.
“Even as AI leaps forward at a rate never seen before, questions around transparency and explainability become paramount if we’re to protect consumers from harm, intended or not,” he said. “The responsibility towards good governance is not changed just because the technology is new.”
ASIC is seeking declarations and pecuniary penalties against RAMS, the group said. The date for the first case management hearing has not yet to be scheduled.
