ANZ sued by ASIC over home loan introducer program

The banking regulator alleges ANZ broke the law by accepting customer information from unlicensed individuals.

More than 50,000 loans were referred to ANZ through the program between 2015 and June 2020. Picture: NCA NewsWire / Naomi Jellicoe

ASIC is suing ANZ Bank for breaches of the Credit Act arising from referrals through its home loan “introducer program” and from unlicensed individuals outside the introducer program.

The program involved home loan referrals to ANZ from third party “introducers” from various professions, such as cleaners and real estate representatives.

“ASIC alleges that between June 2016 and March 2018, ANZ breached consumer protection credit laws by accepting customer information and documents from introducers and other unlicensed individuals when this was not allowed,” the regulator said in a statement.

“ASIC also alleges that some of the documents provided were fraudulent.”

More than 50,000 loans were referred to ANZ through the program between 2015 and June 2020, driving loans worth more than $18.5bn in total. In September 2018, the introducer program contributed to around 10 per cent of all home loans sold by ANZ’s Australian branches.

The program also came under heavy fire at the financial services royal commission in 2018.

At the hearings, ANZ executive William Rankin told the commission that it would be “highly complex, very time-consuming, very costly” and ultimately not necessarily that helpful to undertake a manual review to verify a customer’s statement of financial position.

On Friday, ASIC Deputy Chair Sarah Court said the regulator “is concerned that as a result of this conduct some loans may have been granted by ANZ based on false information and some consumers may have entered into home loans that were beyond their ability to pay.

“If banks are going to accept referrals of consumers seeking a home loan from unlicensed individuals, who receive commission payments for the referrals, they need to make sure they have the right systems in place to properly process those referrals.”

The court action also follows a $15m penalty lobbed at National Australia Bank last year, for misconduct related to its own introducer program.

ASIC is seeking declarations, pecuniary penalties and other orders against ANZ.

In a brief statement, ANZ said it had co-operated with ASIC’s investigation and established a customer remediation program, as well as improving its home loan processes and controls.