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BFCSA
MORTGAGE
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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA Blog

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

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Why the banking royal commission is bad for equity, good for debt Australian Financial ReviewMay 18 2018 10:36 AM Christopher Joye   One of the most enduring legacies left by the royal commission will be more conservative and risk-averse banks. This process was already underway  after the Australian Prudential Regulation Authority (APRA) embraced the 2014 financial system inquiry recommendation that the banks deleverage. Since then the four majors have raised more than $50 billion in tier one equity and reduced balance-sheet leverage from  more than 25 times to around 18 times today. Given a static return on assets, lower leverage translates into smaller returns on equity, as we have seen. Most of the majors had also decided to divest themselves of non-core businesses, including exposures to Asia and the UK, funds management concerns and life insurance licences. Since the Coalition's failed 2014 attempt to roll back the future of financial advice...
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Dollarmites bites: the scandal behind the Commonwealth Bank's junior savings program Sydney Morning Herald 18 May 2018 Adele Ferguson   Thousands of children’s Commonwealth Bank accounts were fraudulently set up by retail branch staff as part of a widespread scam to earn bonuses and meet aggressive performance targets. The scam involved CBA staff either using the bank’s money, sometimes loose change or their own money to illegitimately activate Youthsaver accounts for financial gain. They would do so when parents had signed up their kids for school banking, often referred to as Dollarmites, but had not deposited money into the account within 30 days. If no deposit had been made, the sign-up would not count towards sales targets and financial rewards. A Fairfax Media investigation can also reveal that the scam is part of a broader culture of gaming financial incentives at the bank where staff were caught faking customer referrals to...
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How ASIC’s fee probe caused an earthquake The Australian 12:00am May 19, 2018 Pamela Williams   On August 15, 2013, one of Australia’s biggest banks, ANZ, met with officials from the Australian Securities & Investments Commission in a bland meeting room at 100 Market Street, the regulator’s offices in the heart of Sydney. The bank had a letter to hand over, a letter that would shed light on a very dirty secret rife in the financial advice business and which would start the ball rolling on a years-long crackdown by ASIC. The letter was a breach notification from ANZ, couched in low-key legalese; in a nutshell, ANZ was notifying non-provision of advice. In plain language, that meant numerous clients of the bank’s financial advice arm had been charged fees for financial advice but had been given none. ASIC would set up an investigation into the matter, eventually throwing a sprawling net...
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Estate agent facing $82,000 legal battle after REIV commissions bungle Australian Financial Review May 17 2018 11:00 PM Larry Schlesinger   The first of a possible flood of claims by vendors against their estate agents over commission payments will be heard in the Victorian Supreme Court in July, following a recent landmark Court of Appeal ruling. An elderly Melbourne woman is seeking a ruling to prevent her estate agent from collecting an $82,000 commission on the 2017 sale of her Beaumaris home because the agent allegedly used a non-compliant Exclusive Sales Authority form sold by Real Estate Institute of Victoria (REIV) to secure the listing. The ESA form, one of tens of thousands sold for years by the REIV and which entitles an agent to be paid for their services, has put hundreds of millions of dollars of commission payments at risk while also throwing the spotlight on state government watchdog...
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ASIC chair James Shipton vows tougher action on bad corporate conduct The Australian 12:00am May 18, 2018 Andrew White   Corporate Australia has been put on notice that the Australian ­Securities & Investments Commission will use “every inch” of new powers to crack down on bad behaviour in financial services. New ASIC chairman James Shipton promised a new, more intensive supervisory approach by the regulator as he accused companies of failing to act as the first line of defence against bad behaviour and undermining the financial system and the corporate regulatory structure. Mr Shipton said Australian businesses — and the finance sector in particular — were suffering from a “trust deficit” of their own making and it was the responsibility of business to repair this. Just three month in the role, the former Harvard lawyer and Hong Kong securities regulator said he planned to use new regulatory powers as soon as...
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ANZ offloads majority stake in Cambodian JV The Australian 9:23pm May 17, 2018 Michael Roddan   ANZ has sold its majority stake in a Cambodian joint venture in a move that further unwinds the bank’s exposure in the region. The sale of a 55 per cent stake in ANZ Royal Bank to Japanese financial house J Trust was booked at a $30 million loss. Significantly, the sale removes a thorn in the side of ANZ just as all banks are coming under scrutiny in Australia. ANZ was exposed to a furore in 2014 over the commercial rela­tionship between ANZ Royal Bank and exploitative Cambodian company Phnom Penh Sugar. ANZ Royal provided a loan facility to PP Sugar worth tens of ­millions of dollars to partly fund the establishment of a new sugar ­plantation and refinery. But the relationship broke down over the company’s inadequate response to a detailed project plan developed...
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Macquarie lays off advisers, merges private bank and wealth units The Australian 12:00am May 18, 2018 Michael Roddan, David Rogers   Macquarie Group has told dozens of advisers to pack up and leave the business as it confirmed plans to merge its private bank and private wealth divisions in an ­attempt to target ultra-rich investors in Australia. Macquarie yesterday informed about 30 private wealth staff their duties were no longer required at the so-called Millionaires’ Factory, as part of a plan to concentrate on the more than one million Australians with a wealth above $1.3 million. Volume-based commissions also appear to have been targeted during the overhaul, with chief executive Nicholas Moore and deputy managing director Greg Ward said to be cracking down on “the grid”, a form of volume-based commissions. The group’s private wealth division is contained within Macquarie’s banking and financial services division run by Mr Ward. Macquarie said...
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Business loans growth to outpace mortgages, NAB says Sydney Morning Herald 17 May 2018 12:15am Clancy Yeates   Business loans are likely to grow more quickly than lending for residential property, in a changing of the guard that would see banks compete more fiercely for business customers, National Australia Bank executive Anthony Healy says. As the slowing housing market dampens banks' outlook, the chief customer officer for NAB's business and private banking arm highlighted indicators that suggest the home loan market's growth rate could be overtaken by the growth in loans to business. Such a shift would mark a major turning point in the local banking sector. Aside from a brief period in 2015, home loan growth has consistently outpaced lending to businesses, a trend that has especially benefited the biggest retail banks, the Commonwealth Bank and Westpac. However, any boost in business credit would probably trigger more competition in this...
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Banking royal commission casts doubt on regulator ASIC's enforceable undertakings ABC News17 May 2018 Dan Ziffer   Do the crime, but negotiate the time. Enforceable undertakings are a controversial Australian invention to punish corporate wrongdoers without regulators taking expensive court action. The Commonwealth Bank recently copped two in just one month. The nation's largest bank had to add $1 billion to its risk capital after a report into its grim culture, and was forced to pay out $25 million after the scandal of rigging the bank bill swap rate. The agreements between a company and a regulator head-off lengthy and costly court action and are supposed to remedy problems in the financial sector. But are the undertakings a copout? Former federal treasurer Peter Costello told The Business how little he thinks of them as an enforcement tool. "I'd like to hear ASIC explain to the royal commission why it works that...
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Regulators’ culture in question The Australian 12:00am May 17, 2018 Richard Gluyas   Poor culture in large corporations has never been under more intense scrutiny, with the damning review of Commonwealth Bank by an APRA panel and the extraordinary implosion of AMP in the wake of last month’s royal commission hearings on financial advice. But what of the culture inside our regulators and powerful quasi-judicial bodies, such as the industry funded Financial Ombudsman Service? As the Australian Financial Complaints Authority — the one-stop shop for all financial complaints and disputes — absorbs FOS and starts hearing complaints by November 1, there are serious, lingering concerns about the discovery of inaccurate file notes made in 2015 by a senior FOS official, Justi Tonti-Filippini. While Tonti-Filippini had the title Ombudsman Decisions and was mentioned in the body’s 2017 annual report, a FOS staffer told Four Pillars she no longer worked there. Despite this,...
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AMP threatened with a fifth class action The Australian 3:09pm May 16, 2018 Michael Roddan The courts are likely to allow only one of the five lawsuits to go ahead, but Maurice Blackburn said the decision would not be solely based on who offered the lowest price.  A fifth class action has been flagged against AMP,  Lawyers joining litigants are vying against the beleaguered wealth management group. The firm joins rivals Maurice Blackburn, Quinn Emanuel Urquhart & Sullivan, Phi Finney McDonald, and Slater and Gordon, who have now announced class action suits against AMP over the plunge in its share price following revelations at the banking royal commission last month. The commission heard AMP repeatedly misled the corporate watchdog over deliberately charging financial advice customers for services they did not receive. Only two firms have formally lodged their claims, with Phi Finney going to the Federal Court and Quinn Emanuel to...
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Royal commission could hurt housing, RBA’s Guy Debelle warns The Australian 12:00am May 16, 2018 Michael Roddan   Australia’s central bank has joined a chorus of economists warning that the banking royal commission could spark a real estate downturn if lenders are forced to dramatically overhaul their standards. Reserve Bank deputy governor Guy Debelle yesterday told a forum of international bankers that Australia’s heavily indebted households and the likelihood of higher mortgage repayments remained a key risk to the economic outlook. Dr Debelle said heavily indebted borrowers could derail economic activity if there was a jump in interest rates, borrowers faced higher repayments or lenders significantly tightened lending standards in the wake of the findings of the royal commission — all of which could materially dent house prices. Speaking to finance workers at the International Swaps and Derivatives Association forum in Hong Kong, Dr Debelle said fallout from the royal commission...
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Phil Khoury first up at bank inquiry as spotlight turns to small business lending The Australian 12:27pm May 16, 2018 Richard Gluyas   After his kind offer to help AMP renew its board, perhaps with a little more zeal than the company anticipated, financial services royal commissioner Ken Hayne now turns his attention to bank lending to the small- and medium-sized business sector. The show kicks off on Monday and continues until the close of business on Friday, June 1. As with the previous round of hearings on financial advice, some initial scene-setting rules out the prospect of immediate fireworks. The word on the street is that the first witness in the box on Monday morning will be Phil Khoury of the governance and accountability advisory group Cameron Ralph Khoury. Khoury is best known for his review of the Code of Banking Practice for Anna Bligh’s Australian Banking Association. The new...
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Banking royal commission: JPMorgan fears big job losses The Australian 8:50pm May 14, 2018 Michael Roddan   There are renewed fears of economic fallout stemming from the royal commission into the banking sector, as regulators and the government look to overhaul the way fees are paid across the financial services sector. A crackdown on financial advice — including killing off problematic trailing commissions that were grandfathered in 2013 — could end a significant money spinner for the largest banks and wealth managers as the fallout from the royal commission continues to build. JPMorgan analyst Sally Auld said the financial sector could face a stunning crash in employment worse than the last ­financial crisis. “The finance and real estate sectors now represent 12 per cent of GDP,” Ms Auld told investors. “Together, these sectors have been growing above their long-term trend, so some consolidation seems likely. “Employment in these industries could contract...
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About 8200 will be ‘sleeping rough’ tonight The Australian 12:00am May 15, 2018 Rick Morton   The number of people sleeping rough or living in insecure housing in NSW jumped 37 per cent in just five years, almost triple the rise of Queensland, the second-worst state according to analysis by independent researchers. While homelessness fell 11 per cent in the Northern Territory, the housing crisis worsened in Darwin, where the number of homeless soared 36 per cent. The snapshot, commissioned by community agency Launch Housing and written by Univer­sity of NSW and University of Queensland researchers, measures homelessness as those sleeping on the streets, in overcrowded housing or with no secure, permanent shelter. About 116,000 people are homeless in Australia and of these about 8200 “sleep rough”. Between the 2011 and 2016 censuses, the nation’s population grew 9 per cent but homelessness rose 14 per cent, affecting some groups, especially indigenous...
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CBA finance chief Rob Jesudason’s exit makes Matt Comyn’s job harder The Australian 12:00am May 15, 2018 Richard Gluyas   The revolution under way at Commonwealth Bank has many dimensions, not in the least the sixth vacancy in the executive leadership team created by yesterday’s announcement that chief financial officer Rob Jesudason will return to Hong Kong to join a blockchain company. Suffice to say that new chief executive Matt Comyn is not happy with the way events have panned out. He believes he secured a verbal commitment from the CFO that he would stay in his post for a reasonable period after the CEO changeover from Ian Narev, perhaps towards the end of the calendar year. Jesudason, who was briefly an internal candidate to succeed Narev, is understood to have informed Comyn on Friday of his plan to join the blockchain company Block.one. Any prospect of working out a notice...
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  After Malaysian election, another royal commission beckons for ANZ Australian Financial Review May 14 2018 10:00 PM Myriam Robin   While the cause of much jubilation in Malaysia, we doubt the election of Mahathir Mohamad last week was treated as good news at ANZ. If the new government follows through on election promises, and there's no reason to think it won't, it will likely drag ANZ's top brass to face yet another royal commission. And we thought Hayne's was plenty to be going on with! Between 2011 and 2013, $US4 billion disappeared from the sovereign wealth fund 1MDB, and turned up in "investments" ranging from the movie that made Jordan Belfort the poster boy for trading floors everywhere to a $300 million, 90-metre superyacht. With the scandal still causing outrage, and probes having been quashed by the old government, the Pakatan Harapan coalition ran on a policy of enacting a...
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Billion dollar squeeze on state budgets as property markets slow Australian Financial Review May 13 2018 11:45 PM Duncan Hughes   The Victorian and NSW governments are bracing for a multibillion-dollar slowdown in tax receipts as lower property sales and slower price growth squeezes stamp duty receipts, analysis of government documents shows. Both states' Treasuries are warning their governments they might have to tighten their belts after nearly seven years of tax windfalls filled their coffers, the analysis shows. In Victoria, stamp duty, or land transfer duty, is expected to grow 3.8 per cent to $7.1 billion in 2018-19. By contrast, the $6.8 billion haul expected for 2017-18 represents an 11 per cent increase on the previous year. Over the forward period the growth is expected to average 3.2 per cent. In NSW stamp duty receipts are falling below official mid-year forecasts as rising costs, a crackdown on interest-only lending to...
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'You can't regulate for culture': next AMP chair David Murray Sydney Morning Herald 12 May 2018 12:15am Clancy Yeates   The next chairman of troubled wealth giant AMP, David Murray, maintains that improving the cultural problems plaguing the financial sector will not be achieved by regulation alone. The royal commission has exposed wide-ranging misconduct within the industry, including customer rip-offs and the provision of dodgy financial advice, which has led to expectations the sector will inevitably face further regulation. After another bruising week for AMP,  which has faced a revolt from its shareholders as three directors said they would step down, Mr Murray said he thought the key to improving culture in the industry was to promote clear systems of accountability within companies, and he remained opposed to "regulating for culture". Mr Murray was appointed to be the next chairman of AMP last week, days after former chair Catherine Brenner stepped...
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Marty Cohen: the man behind CBA’s sales culture unveiled michaelwest.com.auMay 11, 2018 Michael Sainsbury A different version of this article also appeared in Crikey. Michael Sainsbury is a freelance journalist based in Asia with more than 20 years’ experience writing about business, business politics and human rights across Australia and the Asia Pacific.   “Rah-rah-style motivational forums” and a $40 million chit for US consultant Marty Cohen helped to shape the aggressive cross-selling Commonwealth Bank sales culture which led, in part, to the customer disaster now unfolding at the banking Royal Commission and billions in losses. Michael Sainsbury reports. The Commonwealth Bank shifted to an increasingly profit-driven services model promoted by an eccentric US management group which drove almost its all staff – from salespeople to risk managers and even auditors – to discover new leads for sales. When the Commonwealth Bank employed New Zealander Ralph Norris, they clearly weren’t concerned...
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Cocaine, girls, million-dollar fraud: What the Commonwealth Bank lender did next The Age 11 May 2018 10:46pm Chris Vedelago & Cameron Houston   [Click here for the online article (non-paywalled as at 8:20 AM), which includes additional quotations in a graphic format that would not copy into this document, along with links to audio recordings. –RJB] A Commonwealth Bank loans officer who perpetrated a $3.5 million fraud on the bank and spent up big on cocaine, "lots of girls" and fine dining, was never reported to police, allowing him to continue working in the financial services sector. Former Melbourne-based mobile lender George Vrettakos told the bank that others were implicated in his behaviour but the bank appears to have never followed up the information he provided. Mr Vrettakos exploited weaknesses in the bank’s internal systems, starting in 2008, to create fake loan accounts that he used to purchase a million dollar...
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Banking royal commission: Financial advisers hit back at allegations The Australian 12:00am May 12, 2018 Ben Butler   Financial advisers criticised for providing shoddy advice or failing to act in the interests of clients during the banking royal commission have hit back in submissions to the inquiry. Former Westpac planner Andrew Smith, former ANZ planner John Doyle, celebrity adviser Sam Henderson and Dover boss Terry McMaster — who collapsed in the witness stand while giving evidence to the inquiry — deny most of the allegations made against them during hearings last month. Mr Henderson’s advice shop, Henderson Maxwell, hit back at suggestions by counsel assisting the commission, Rowena Orr QC, that it had committed a crime by telling investors he possessed a qualification he did not and by failing to declare his shareholding in a company that administered funds he recommended to clients. His behaviour in giving advice to Fair Work...
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Whistleblower reveals more unethical behaviour inside AMP Australian Financial ReviewMay 10 2018 11:00 PM Chanticleer   AMP's record-high negative 61 per cent vote against its remuneration report is the least of the wealth manager's worries when weighed against the prospect of the company's core advice business disintegrating. The securities regulator could put the last nail in the AMP advice coffin with its planned ban on grandfathered commissions, which form the majority of revenue for AMP's financial planners. It is clear from the treasure trove of documents uncovered by the Hayne royal commission that AMP's advice business is riven with immoral and unethical conduct and needs to be disposed of. It is extraordinary that this conduct has been going on for years right under the eyes of managers who have been unwilling to put a stop to it. Chanticleer discovered how bad the situation has been during an interview with an AMP...
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CBA faces mounting costs as financial scandals bite The Australian 12:00am May 11, 2018 Michael Roddan   The verdict on the challenges faced by Commonwealth Bank is that things will probably only worsen from here, with legal bills and spending on overhauling the lender’s compliance frameworks continuing to expand. CBA this week revealed that the litany of scandals rocking it have started to bite as the nation’s largest bank disclosed a drop of almost 10 per cent in quarterly profit amid signs more borrowers were falling behind on their mortgages. “This is the first time we have seen a major bank comment on the impact from pressures on household cash flows,” UBS analyst Jonathan Mott said. CBA shares yesterday fell for a second day — wiping more than $4 billion from the bank’s market capitalisation — as investors digested the surprisingly weak results. The bank said expenses increased by 3 per...
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Banking royal commission: Pressure to break up banks as Treasury, ASIC lash model The Australian 12:00am May 11, 2018 Michael Roddan   The corporate watchdog and Treasury have laid out stinging criticisms of vertically integrated financial players in responses to the royal commission that raise the pressure to break up Australia’s largest banks. Treasury told the royal commission into financial services that the second round of hearings had made it “clear” that poor culture and misaligned incentives were the “key cause” of misconduct, and said there were many benefits that could come from the major banks splitting up their financial advice and wealth management arms. In a cache of submissions to commissioner Kenneth Hayne, and released last night, banks and regulators had been asked to justify the entangled cross-ownership of businesses and address issues such as conflicted remuneration for financial advisers, the shunting of customers into in-house ­products and the breakdown in...
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