Fraudsters cost Australia a whopping $372.7m last year alone, and ASIC says the issue is a serious one within the mortgage broking industry.
Fraudsters cost Australia a whopping $372.7m last year alone, and ASIC says the issue is a serious one within the mortgage broking industry.
ASIC spokesperson, Daniel Wright, said the organisation is seeing a ‘continuing’ trend of fraud within the mortgage broking industry and says it is the category of misconduct involving brokers that is, in fact,
most regularly reported to ASIC.
“ASIC is particularly concerned with instances where persons have engaged in fraud or other misconduct relating to information provided in loan applications. Since the commencement of the NCCP, ASIC has banned six persons from engaging in credit activities for such conduct and has 18 other current investigations. ASIC has also secured criminal charges against one finance broker under the responsible lending provisions of the NCCP.”
But MFAA CEO Phil Naylor argued that fraud remains a relative rarity in the mortgage broking industry, accounting for less than a handful of finance industry cases.
“From MFAA’s experience, lending fraud occurs but based on our expulsions – three last year – it is clearly not a major issue for brokers. All lenders, aggregators and good brokers have systems and checks and balances to mitigate against fraud.”
Yet, a report released by KPMG – in the very same week that ASIC clamped down on two rogue brokers – brings the issue to a head.
Finance, perhaps unsurprisingly, boasts the highest fraud rate of any industry in Australia, according to KPMG’s 2013 Survey of Fraud, Bribery and Corruption in Australia and New Zealand. The report found that the financial services industry accounted for 86% of all fraud in Australia and New Zealand in 2012. Twenty-five per cent of fraudsters came from outside the company they victimised.
