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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: Rushmore Forensics on Banking and Low Docs: Where is the Investigation?

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‘Loan fraud’ – but no investigation

fraud investigationConsumer activist Denise Brailey has countered claims from the corporate watchdog that she had failed to provide documents for them to investigate low-doc loan fraud.

Australian Securities & Investments Commission deputy chairman Peter Kell told Fairfax Media and the ABC this week that ASIC had invited Ms Brailey to “provide evidence of the systematic loan fraud she alleges”.

The very limited material provided to date simply does not support any of the claims she makes,” said Mr Kell.

However, Denise Brailey has confirmed that more than 100 of the members of her action group, all alleging loan fraud, had filed complaints with ASIC only to receive a form letter saying there would be no investigation and advising them to get a lawyer.

ASIC turns down request

BusinessDay has contacted many of the borrowers to confirm this. The borrowers, many who are pensioners and small business people, cannot afford a lawyer. Of these complaints, many had Loan Application Forms (LAFs), which they claimed had been tampered with, attached.

“ASIC has close to 100 LAFs from members (of her action group Banking & Finance Consumers Support Association) who say they wrote letters to ASIC and lodged formal complaints and attached the offending LAFs,” said Ms Brailey.

“Others wrote letters (another 60 people or more) that were formal complaints that contained no LAF. Every one of my members says they received an identical form letter from ASIC.”

As reported on Monday, the veteran consumer rights campaigner has made public 2500 private emails and bank documents to expose what she describes as ”Australia’s subprime crisis”.

Ms Brailey claims that lenders and mortgage brokers tampered with documents to provide more credit for borrowers with ”low-doc” loans.

She says she is making private documents public after years of trying to get corporate regulators to investigate the banks and other lenders over what she alleges is ”systemic fraud” in the ”low-doc” market.

Low-documentation loans are made to borrowers such as business owners who can’t prove a regular income, but the borrower signs a declaration as to estimated income. The loans usually carry a higher interest rate than other loans, as they are seen as more risky.

Of the borrowers who have asked for help from Ms Brailey’s action group, Banking & Finance Consumers Support Association, 1170 of them claim their loan application forms (LAFs) have been tampered with. In most cases, the income figure has been increased to justify more credit. “There is not one clean ‘LAF’ amongst them,” said Ms Brailey.

The banks and the corporate regulators reject Ms Brailey’s claims. They say fraud in the low-doc loan market is the fault of ”rogue” mortgage brokers.

In his repudiation this week of the Brailey claims, Mr Kell said ASIC had recently banned seven mortgage brokers for fraud or misconduct relating to loan applications.

Not just ‘rogue brokers’

However, the flood of responses this week to the Brailey claims, along with the emails and other documents published this week on her website, support the view that low-doc fraud is more widespread than the work of ‘‘rogue’’ brokers.

Lawyer Graeme Hancock, who has assisted victims of low-doc lending, says the cases he has seen corroborate this.

“I’ve reviewed many files from BFCSA,” Mr Hancock said. “I’ve seen towards 100 Loan Application Forms, all of which have been completed in more than one set of handwriting, and all the income details are grossly overstated in someone else’s handwriting.

“The mere fact that I have seen the same thing in so many cases clearly suggests this type of thing is systematic. Other parts of the process, such as the broker asking the borrower to sign the application form as ‘true and correct’ without all the detail being included is just too widespread to be just a coincidence.”

Most of the people Mr Hancock had interviewed did not have the means of fighting lending recoveries. The situation had improved with the introduction of the national lending laws in 2010. Until then it was only NSW borrowers, under the Contracts Review Act, who could ask the court for relief on the basis that the transaction was unjust.

“But that doesn’t help anybody before then and I gather they are the vast majority of cases. Without being able to take the unjust route you would be left trying to prove that the transactions and the relationship was unconscionable, which is very difficult,” he said.

Service Calculator

In another aspect of the claims, Denise Brailey has downloaded on her website information relating to the Service Calculator which she says is the program used by all the banks and other low-doc lenders that determines the exaggerated incomes and the bank computers then use the false information to execute the loan approvals.

It is via the Service Calculator that the lenders are orchestrating the low-doc lending process and using the brokers as their agents, she claims. Mortgage brokers have a password the Service Calculator which enables them to enter the bank and non-bank lender’s computer system to have loans processed but it is the lenders who determine the outcome.

Therefore, she claims, the lenders are responsible for the ‘imprudent lend’ to customers who cannot afford the loan.

Ms Brailey has called on ASIC and the Financial Ombudsman Service to use their powers to demand the lenders release the Loan Application Forms and information relating to the Service Calculator which she maintains is the key to unlocking the systemic fraud.

This article originally appeared in Kempsey’s Macleay Argus

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  • doyla66
    doyla66 Monday, 16 September 2013

    Mr. Kell may need to have his eyes tested. Perhaps he is suffering from selected dementia. Just what do you want Mr. Kell.? Just how many complaints regarding the banks fraudulent activities do you need.? Just when are you going to admit the truth about these fraudulent LAF's? Why is ASIC not responding to the atrocities committed against us? My final questions Mr. Kell "When are you due to retire, and when can we expect to get see the law and justice against the banks? We need someone with a backbone to take your job.? Give us a break Mr. Kell

  • doyla66
    doyla66 Monday, 16 September 2013

    Unbelievable the arrogance and stupidity of ASIC! As if anyone believes their self-defense!
    ASIC don't want to investigate this because then they would have to explain it, quantify it, monitor it and be accountable for it.
    Not to mention it would prove Denise Brailey correct in the information that she has found to date.
    ASIC will do anything to avoid this truth coming out, according to my informant. That should be ringing alarm bells with every member of the Senate Economics Committee. What are they offering ASIC staff by way of protection so they can speak up about what has been going on from their side of the granite wall?
    I agree, Nanna - retiring Kell and the entire ASIC board would be a good start in the right direction. Kell seems to be unwilling to apply the real Law to the Banking fraternity. So is Medcraft. This is unacceptable and in effect ASIC have been complicit in this coverup. There is no excuse for the ASIC Board, none whatsoever. Especially now that BFCSA are having discussions with borrowers, investors and even politicians around the world about the mechanics of this international systemic loan fraud. Ignore this at your peril, all you regulators who would not help us because these cases didn't fit your jurisdiction, or whatever proforma flick letter you decided to use to tell honest writers to bugger off stop bother you, the Great Important Ones. Bah and humbug :D
    Delusions of grandeur have no place in sound regulation. We with our eyes open and our feet on the ground will not tolerate this.
    Cronyism and favours for mates have no place in the peak corporate regulator, not now, not ever.
    Zero tolerance for any taint of misconduct or corruption should be the order of the day from this point onwards.
    The corporate regulators should ALL be above suspicion, deserving of respect, not the laughing stock and brunt of jokes for so many years. International investors must think the Australian government had lost their minds allowing this to continue. So do we.
    When will this be put into effect? Do the long suffering Australian public have to wait until the Inquiry is over for any form of just action and due process?
    After all it is this upright and uncorrupted straight style of economic management that led to the recent change in the Australian government.
    Mr Hockey, Mr Abbott and all Australian Senators we're counting down the days to the Banking Inquiry announcement, with suitcases of evidence in hand for your inspection. Don't believe any of us - see it for yourselves - it's the real thing. :)

    PS .... Can't you just see it ... with new evidence pouring in from around the world, Denise Brailey cracks the giant international ponzi scam so convincingly that she becomes an international celebrity criminologist. ASIC belately realise they had better find a way to take the credit for Denise's hard work. Not the first time, of course. ASIC will then claim that it was really their work that led to this discovery. The media go "What the ...?" Kell then explains that ASICs insistence that Denise do further research into Loan Fraud resulted in this important discovery by ASIC.

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