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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: Banking royal commission galahs circle new targets over car loans. What about Mortgage Fraud?

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Banking royal commission circles new targets over car loans

Australian Financial Review Feb 13 2018 6:00 PM

James Frost


Specialist lenders including Macquarie Group, Toyota Financial Services and Latitude Finance will join the big four banks as Hayne royal commission targets when providers of car loans come under the microscope for poor lending standards and gouging customers.

The auto finance market was singled out by the royal commission as a key area of interest after early investigations revealed examples of lending that were not conducted honestly or fairly. The dealer finance market is dominated by Toyota, Westpac and Macquarie with the finance arms of Mercedes-Benz, BMW and Nissan close behind.

Among the worrying business practices that have been discovered to date are irresponsible lending, flex commissions and junk insurance. The royal commission on Monday said it was interested in completed case studies of misconduct, which suggests it will focus on settled matters.

Over the past 10 years the value of personal finance commitments relating to motor vehicles has almost doubled.

Among those to attract the wrath of the regulator was BMW Finance, which paid out $77 million for dodgy loans in December 2016.

Earlier this year ANZ reached a $5 million settlement with the regulator for consumer credit breaches relating to its Esanda business, which Macquarie now owns.

ASIC announced its intention in September 2017 to ban the practice of salesmen earning bigger commissions through signing up customers to higher interest rates. Known as flex commissions, the arrangement charges unsuspecting customers premiums of up to 700 basis points over the regular rate.

The regulator said consumers were regularly charged more than businesses and some customers attracted higher prices unrelated to their respective risk profiles.

ASIC has also done considerable work around car yard or add-on insurance. These are typically junk insurance policies that deliver commissions or kickbacks to the sales agent of up to 79 per cent of the premium.

They were sold as credit insurance, gap insurance, loan termination insurance, mechanical breakdown insurance and tyre-and-rim insurance.

Late last year Commonwealth Bank returned 65,000 customers a total of $10 million after selling them unsuitable consumer credit insurance.

An investigation by the regulator revealed that over three years customers paid $1.6 billion in premiums for car yard insurance with car dealers receiving commissions of $602 million and customers receiving claims of just $144 million.

Macquarie Group bought the Esanda car finance business from ANZ in 2015 for $8.2 billion. Macquarie also owns Ford Credit. Its multibillion-dollar book of car leases are part of its Corporate Asset and Finance Group (CAF), which last year contributed to a 6 per cent rise in divisional profit of $1.2 billion.

At a briefing by Macquarie last week the group revealed that approximate return on equity from its annuity businesses (of which CAF is a part) in the first half of 2018 was 28 per cent. The royal commission last week highlighted as noteworthy similar returns generated by the banks.

Latitude Insurance, part of Latitude Financial, refunded 905 customers $1.1 million after it selling them consumer credit insurance and then incorrectly denying the claims.


Capital Finance, now owned by Westpac, paid penalties of $493,000 in 2016 for breaching consumer protection repossession laws on 58 occasions.

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