(Reuters) -Australia’s Federal Court imposed a A$20 million ($13 million) penalty on a Westpac unit over widespread financial misconduct in arranging home loans, including using falsified payslips, the country’s corporate regulator said on Friday.
Australia’s credit sector has been under intense scrutiny since a 2019 Royal Commission report revealed widespread governance issues and misconduct in the banking, superannuation, and financial services industry.
Last month, Westpac peer ANZ Group agreed to pay a A$240 million penalty, one of the largest against a single entity by the Australian Securities and Investments Commission (ASIC), over failures ranging from acting “unconscionably” in a government bond deal to charging dead customers.
The latest case involved RAMS Financial Group, a wholly-owned subsidiary of Westpac, the country’s second-largest lender by market capitalisation. It provided credit services to first home buyers and self-employed borrowers.
ASIC had filed a lawsuit in June alleging RAMS used falsified payslips to approve home loans. It did not provide monetary details of the misconduct.
Siding with ASIC, the court said RAMS did not have proper checks and balances in place.
It found that, between June 2019 and April 2023, RAMS dealt with unlicensed referrers and failed to ensure customers were not disadvantaged by any conflict of interest.
RAMS had earlier admitted to dealing with unlicensed mortgage operators, failing to properly supervise its representatives, and other shortcomings. It stopped writing new home loans last year.
“Financial entities must adhere to their obligations under the law and consumers must be protected from lending practices which can expose them to harm,” said ASIC’s Deputy Chair Sarah Court.
A Westpac spokesperson told Reuters in an email that RAMS had cooperated with ASIC throughout the investigation and completed customer remediation in 2024.
The penalty was provisioned and included in Westpac’s 2025 half-year results, they said.
($1 = 1.5389 Australian dollars)
(Reporting by John Biju in Bengaluru; Editing by Mrigank Dhaniwala and Harikrishnan Nair)
