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More penalties against introducer programs

Friday 26 November 2021

 
The Australian Securities and Investments Commission (ASIC) has acted against the Australian & New Zealand Bank’s (ANZ)  introducer program.

The conduct regulator alleges that between  2016  to 2018 the member of the big four breached consumer  protection credit laws and that the bank may have also breached its obligations as Australian Credit License holder  between 2015 and 2020 for not ensuring that its representatives only engaged with licenced third parties.

ASIC Deputy Chair Sarah Court said in an official statement, “ASIC 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.”
 
Past Penalties
Last year, the National Australian Bank was ordered to pay $15 in penalties for breaches in their own ‘introducer program’.

Just after the Royal Commission in the banking and financial services, in which case studies concerning ‘introducer programs‘ were highlighted, the consumer action group Choice  called for a change in how financial products were sold to Australians.
Choice Policy and Campaigns Adviser Patrick Veyret said in an official statement at the time, “ There must be fundamental change to how loans are sold to Australians. By deferring responsibility to introducers and brokers – banks get all the benefits of shonky sales practices, but have avoided culpability for the widespread harm they've caused the community. Shifting blame is no longer acceptable and the banks must be held to account for these programs". 

Almost a year before the Federal Court ruling against NAB, the big four member announced an end to their own introducer program.

“Through the Royal Commission we heard clearly that our actions need to meet the expectations of our customers and the community. We need to be simpler and more transparent to earn trust. We have to put customers first, to be a better bank. ”