In Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited [2023] FCA 256 the Federal Court of Australia declared that ANZ as a credit licensee contravened section 31(1) of the National Consumer Credit Protection Act 2009 (Cth) in relation to 50 home loan applications by conducting business with unlicensed referrers who provided information and/or documents to ANZ about the borrower the subject of the home loan application (beyond their name and contact details and a short description of the purpose for which they may want a provision of credit), and consequently providing credit assistance to the borrower or acting as an intermediary between ANZ and the borrower.

The Federal Court also declared that ANZ contravened section 47(1)(e) of the National Credit Act by failing to take reasonable steps to ensure that its representatives complied with section 31(1) of the Credit Act, in that ANZ did not have adequate processes in place in connection with its Home Loan Introducer Program to ensure compliance with section 31(1) of the Credit Act.

But the hearing judge was not satisfied that it was appropriate to make a declaration in respect of a contravention of section 47(1)(a) of the Credit Act (the obligation to do all things necessary to ensure that the credit activities authorised by the licence are engaged in efficiently, honestly and fairly).

ANZ was penalised $10 million and ordered to pay ASIC’s costs.

Each of the 50 home loan applications, made between April 2017 and March 2018, were from consumers referred to ANZ by two introducers with which ANZ had introducer agreements. The first operated a cleaning business and the second carried on an interior design and building inspection services business. In respect of each of the 50 loan applications, ANZ paid a commission to the introducer.

ANZ further admitted that, between November 2015 and March 2018, the processes and controls that it had in place in relation to the program were not adequate to ensure compliance with its obligations under s 31(1) of the Credit Act. In particular, during this period, there were weaknesses in ANZ’s processes and controls for:
(a) introducer on-boarding and review;
(b) training of relationship owners and lenders;
(c) detecting non-compliance with the obligations of introducers; and
(d) oversight of the compliance risks associated with the program.

See also my note on ASIC v NAB here.

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