Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Aussie under fire over broker commissions

fire match ta fire match ta
Reporter 4 minute read

The royal commission has further interrogated Aussie Home Loans over broker misconduct, this time placing commissions under the spotlight.

Appearing before the commission on Friday (16 March), Aussie Home Loans’ chief financial officer, Giles Boddy, was grilled over alleged misconduct involving brokers who received commissions for their personal home loan applications.

The commission alleged that brokers were “pretending” to be their own clients.

In response, Mr Boddy said: “They’re buying a house, processing their own home loan through a lender and then, because they’re a broker, they’re getting a trail commission on that, so effectively a discount.”

Broker receipt of trail commission also came into question, with both Commissioner Kenneth Hayne and council assisting Eloise Dias expressing concern over the passing on of costs to borrowers.

Advertisement
Advertisement

“The commissions that are being paid by lenders to brokers are passed on to the borrowers; the banks pass those costs on,” Ms Dias contended.

Mr Boddy agreed, but he stated that brokers warrant the payment of trail because of their continued servicing of clients.

Aussie fraud response slammed

On Friday, the commission continued its questioning of Aussie Home Loans general manager of people and culture Lynda Harris regarding the brokerage’s failure to adequately detect and report the misconduct of its contracted brokers.

Ms Harris was questioned over Aussie’s decision not to inform clients of fraudulent activity of four brokers and its failure to detect the fraud in all but one of the cases.

“Is it open for me to conclude, from what you’ve told me, it remains Aussie’s view that it is for the lender, and not Aussie, to investigate and determine whether there is fraud in one or more transactions?” Commissioner Hayne said.

PROMOTED CONTENT


Ms Harris claimed that, at the time that the fraud took place, the brokerage did not have the resources to adequately investigate the misconduct.

“We are reliant on lenders to provide that expertise,” Mr Harris said.

[Related: Royal commission unveils Aussie broker fraud]

Aussie under fire over broker commissions
fire match ta
TheAdviser logo

If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.

fire match ta

 

more from the adviser
Renee blethyn NextGen.Net appoints head of broker

NextGen.Net has appointed its inaugural national head of broker ...

BBS Summit 2021 ta Better Business Summit and Awards Sydney postponed

Due to the ongoing COVID-19 resurgence in Sydney, the NSW leg of ...

Andrew Moulds Darren Smith ta Lend adds FleetPartners to platform

Lend has integrated vehicle fleet leasing and fleet management pr...