This article may seem a little off-topic for the MRA Website, but be warned it is not.
The Child Support Agency has for many years been able to access banking documents, loan applications and other financial details about your personal finances. On many occasions we have noted CSA have conducted a review and set the income used for assessing the amount of child support to be paid at the level shown in a loan application.
Currently there is a case being heard in the Federal Courts, where a father has been assessed on an income taken from his property loan application. Not only was this loan inflated, but the signature on the loan had been copied and pasted from another document . The father had no knowledge of the inflated income used in the application. He certainly did not sign such a document. Police action is pending to charge the alleged perpetrator – a mortgage consultant with a major lender.
For more on this situation – go to our Action Now page where you can read more about the fundraising needed to provide some financial support for this father. We need your help to do so.
If this case is succesful it could set a strong precedent to control CSA’s misuse of fraudulent information.
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WHEN Gary White received a copy of the application forms behind a $384,000 loan he had taken out through mortgage broker Resi in the property boom he knew something was very wrong.
Mr White’s stated income for the year had been inflated more than sixfold – at $200,000 – and his signature had allegedly been forged and incorrect dates entered by an unknown third party.
Unlike many of the victims of the “low-doc” lending scandal – who are often retirees or less financially aware borrowers – Mr White, a self-employed businessman, has the means to fight in his own defence.
After four years of battling to have his case heard by the corporate regulator, the police, a consumer tribunal and a financial ombudsman, Mr White is still unable to find an authority to take action over the alleged fraud.
“I’ve been absolutely everywhere and no one wants to know about it; it’s simply unbelievable.”
Now Mr White has spent $14,000 having the documents independently forensically examined by handwriting experts – who have found there was “no evidence” that any of the signatures on the documents were his.
Handwriting expert Steven Stratch, a former document examiner with the London Metropolitan Police Forensic Science Laboratory, wrote it was “highly unlikely” that “any of these questioned signatures were written by this person”.
Resi has denied the allegations and said it would comply with any directions made by regulatory bodies. “These allegations have been taken very seriously by Resi,” said Resi chief executive Lisa Montgomery.
Mr White said he was not seeking any restitution or a reduction in his loan balance – and he has never missed a payment on his loan and does not intend to – but wants those allegedly responsible to be held to account.
“If this has happened to me, it’s probably happened to many, many more people and most would probably have no idea this sort of thing has gone on,” he said.
The businessman said he became aware of the alleged fraud only after he had a dispute with Resi after the lender behind the $384,000 loan attempted to charge him a $69,000 “break fee” to refinance to a cheaper lender.
The case was heard by the Credit Ombudsman Service Ltd – an ombudsman authorised by the Australian Securities & Investments Commission and funded by the lending industry – and Mr White had applied for the loan application documents provided by Resi in its defence of the case.
Investigations by The Australian have revealed the practice of loan application fraud was widespread in the five years before the financial crisis of 2008, with many mortgage brokers habitually fraudulently inflating the stated income levels of borrowers to get loans approved and so earn themselves hefty commissions.
The instrument of choice was low-doc loans, loans that were extremely quick to prepare and required no proof of a borrower’s capacity to repay, just a stated income that would meet the lender’s criteria.
Many people now face a dilemma as the corporate regulator has repeatedly refused to handle many such cases, despite it being the authority responsible to do so.
Mr White said COSL and the Consumer Tribunal of NSW had told him they did not have accreditation to handle fraud cases. ASIC told him to go to the police and the police told him to go to ASIC.