The court ordered that the penalty be paid within 30 days, following a case that revealed failings in internal controls and misconduct within the franchise-based lending model.
RAMS, which originally operated as an independent entity, became a mortgage lending brand under Westpac before its closure in 2022. Legal action was initiated after the Australian Securities and Investments Commission identified ongoing failures in loan assessment and approval. In many cases, loans were approved by individuals who lacked the necessary licences, breaching consumer credit regulations.
Court findings revealed serious issues, including the use of fraudulent documents such as fake payslips in loan applications, and questionable conduct by franchisees. In some situations, franchisees used their own funds to pay customer fees or overdue amounts to keep commissions flowing. Westpac acknowledged that RAMS functioned with a separate risk profile and limited oversight from the bank.
The $20 million fine highlights ongoing issues with compliance across the industry. Although only 84 cases of unlicensed referrals were cited, these indicate broader problems within risk management practices. Westpac has since absorbed all remaining RAMS loans and has provided nearly $7 million in compensation to affected customers. The outcome underscores the need for stronger oversight and accountability in franchised financial services.
