Aussie franchisees, Lendi divided over effects of technology problems

Lendi, which subsumed Aussie Home Loans, has admitted it had a technology issue that affected some customer inquiries, postcode collection and home loan referrals.

Lendi CEO David Hyman’s email linked to another site showing some postcodes were not syncing with the Lendi system for two months. Picture: Jane Dempster

Lendi Group, which subsumed Aussie Home Loans in 2021, has admitted to franchisees and mortgage brokers it had a technology synchronisation issue that affected some customer inquiries, postcode collection and referrals.

In an email to its network on Wednesday, obtained by The Australian, Lendi boss David Hyman outlined how “lead allocation” of customer inquiries happened through the Aussie Home Loans and Lendi channels.

His email included a link to another site which showed some postcodes were not in sync with the Lendi Salesforce system for two months, meaning referrals to franchisees were happening manually via staff.

The company’s communication comes after The Australian revealed Lendi is in dispute with a large group of franchisees over how customer referrals and leads are distributed.

The Aussie Franchisee Association has written to its members alleging Lendi had failed to adequately collect postcode information to ensure franchisees of specific territories were receiving the right referrals. In an email to members, the association said the company’s failure to collect postcode information represented a breach of the franchise agreement.

The two sides are at loggerheads over the issue, with Lendi denying it wasn’t collecting postcode data.

“We capture postcodes in all flows,” a Lendi spokesman said.

“If a customer drops off before they enter their postcode, the associate will call and ascertain postcode and then allocate (to a franchisee or broker).

“We also publish a weekly dashboard to all brokers which monitors accuracy of lead allocation, any incidents and relevant rectification. Of tens of thousands of interactions every week, we have less than 0.5 per cent error rate of which all are rectified.”

But several franchisee and mortgage broker sources questioned the validity of Lendi’s statements on Wednesday, saying the referral system was unclear and the company wasn’t transparent in how it was allocating customer leads. Several franchisees have reported receiving leads from head office relating to customers in other states to where they are based, raising doubt about how the postcode collection and referral system is working.

Franchisees that bought Aussie businesses were guaranteed they would receive leads for a particular territory.

Lendi Group subsumed Aussie Home Loans in 2021.

Three large banks that own stakes in Lendi are keeping tabs on the tense situation.

Commonwealth Bank, ANZ’s external venture unit 1835i and Macquarie Bank hold respective stakes in Lendi, with CBA being the largest of the bank shareholders owning about 40 per cent. ANZ and Macquarie account for separate holdings of less than 10 per cent apiece. Spokeswomen for CBA and ANZ declined to comment, while a Macquarie spokeswoman was not available.

Responding to a question about engagement with the board, a Lendi spokesman said: “We’re fully transparent with our board.

Lendi Group’s board is fully supportive of management and its transformation program and welcomes ongoing engagement with all of our brokers through a wide array of forums including the Aussie Franchise Council, Signature Diamond Brokers, and Aussie Franchise Association.”

Some franchisees are backing the parent company’s position. “We recognise that the new ways we have of engaging customers is important to the growth of our business and Aussie,” said Danny Blair, an Aussie franchisee for Forest Lake, Kenmore, Mt Ommaney, Ipswich and Paddington.

The Aussie Franchisee Association represents half to two-thirds of Aussie’s 230 stores, pitting the two groups against each other over the postcode issue and changes to commission structures that have been introduced since Lendi took over.

Participants in the mortgage market have navigated a difficult operating climate in the past 18 months as higher interest rates curtailed lending volumes.

On Wednesday, Mr Hyman told his network Lendi had a “strong close” to the year ended June 30, with loan lodgements of $3.4bn for June taking the financial year’s balance to $43bn.

In the prior fiscal year, Lendi’s accounts lodged with the corporate regulator showed gross mortgage settlements slipped 2.2 per cent to $32.9bn, but the company’s total loan portfolio rose to $98.1bn.

John Symond – who set up Aussie in 1992 – with the catch cry “we’ll save you” from the banks, announced his retirement as chairman in 2020.

Mr Symond, alongside players such as Wizard founder Mark Bouris, was among a group of home loan market disrupters that wanted to loosen the banks’ stranglehold on the mortgage market.