AUSTRAC warns banks on accountant, lawyer loan referrals as fraud probe begins
The financial crimes regulator has issued a fresh warning to banks, as loan referral programs face fresh scrutiny in the wake of an apparent outbreak in fraud.
The financial crimes watchdog AUSTRAC has issued a fresh warning to the major banks to closely monitor the lawyers, accountants and real estate agents funnelling them business under longstanding referral programs amid mounting concerns over fraud.
As regulators begin probing instances of bank fraud, the referral programs run by the Commonwealth Bank, Westpac and ANZ to win mortgage business are facing growing scrutiny. These programs typically involve lawyers, accountants, real estate agents and other professionals being paid kickbacks in exchange for referring borrowers to lenders.
On Tuesday AUSTRAC chief executive Brendan Thomas told Capital Brief the upcoming Tranche 2 reforms, which will require those same intermediaries to report suspicious activity, were designed to address “long‑standing vulnerabilities in professional services that can be exploited to facilitate money laundering, including in real estate, legal and accounting services”.
But while the regulation will shine a light on third party service providers, he also warned banks they must manage their risks and relationships proactively and intervene where necessary.
