The Finance Brokers Association of Australia (FBAA) says the current discussions around fraudulent mortgage applications should be approached from a position of integrity and perspective, ensuring that finance and mortgage brokers are held to the highest standards while the industry is not made a scapegoat.

FBAA interim CEO Peter White AM committed to support any initiative that mitigates risks of fraud and ensures that any broker who is found to have engaged in fraudulent practices is prosecuted.

He said the FBAA will do whatever it takes to be a part of the wider solution.

“Our industry is not immune to bad actors, but equally we must not accept any attempt to tarnish the overall reputation of brokers who are overwhelmingly of excellent character and go above and beyond to serve our clients and support lenders with integrity.”

Mr White said it appears that a key factor in suspected fraudulent activity was the involvement of organised criminal enterprises, which requires the focus of law enforcement and regulators.

“More information and data is needed to get the facts, and when this becomes available we will consider anything we can do as an industry body to play our part.”

However he said lenders must also be held accountable, and it was time for banks to finally re-evaluate some of their own practices including referral programs.

“The FBAA has been calling out some banks for ignoring recommendations from the Sedgwick report and the Hayne royal commission for many years, sadly to no avail.

“It is accepted that referral and introducer programs can be misused, and now they should be eliminated.”

Mr White also pointed to other bank practices and questioned how bank branches can approve applications previously rejected by brokers, “which we know happens.”

He supported calls for an industry-wide approach but said it must include all sectors.

“The finance broking sector has proven that we are prepared to work in the interests of the industry as a whole, even when it may adversely affect us.

“If others are also willing to make the tough decisions – and time will tell – we can combat the problem together.”