Australian securities regulator sues ANZ over mortgage referrals

Commuters walk past an ANZ bank branch in Sydney, Australia on April 23, 2018. REUTERS / Edgar Su

Nov. 26 (Reuters) – The Australian Securities and Investments Commission (ASIC) on Friday announced that it has taken legal action against the Australian and New Zealand banking group (ANZ.AX) for home referrals as part of its “introductory program”.

The regulator added that between June 2016 and March 2018, ANZ violated consumer credit laws by accepting customer information and documents from introducers and other unlicensed individuals, when it was not not authorized.

The Introducer Program is a reward-based program through which businesses and community organizations refer clients and members with mortgage needs to ANZ.

ASIC was concerned that some loans were granted by ANZ on the basis of false information, said Vice-President Sarah Court, adding that some consumers may have taken out home loans beyond their ability to pay.

From 2015 to June 2020, more than 50,000 loans were made to ANZ through the introducers program, resulting in loans of more than A $ 18.5 billion, the statement added.

ANZ said in a separate statement that it cooperated with ASIC during its investigation and also has a client remediation program in place, while “continually improving” its mortgage loan processes and controls.

The scrutiny of Australian lenders and financial institutions has intensified dramatically since a 2018 Royal Commission investigation found widespread shortcomings in the sector, forcing companies and regulators to take swift action.

Last month, the country’s largest lender, the Commonwealth Bank of Australia (CBA.AX) pleaded guilty to 30 criminal charges for mis-selling consumer credit insurance between 2011 and 2015. read more

Report by Indranil Sarkar in Bengaluru Editing by Nick Zieminski

Our standards: Thomson Reuters Trust Principles.