Westpac responds to whistleblower’s home loan fraud claims

Westpac responded to a number of sensational allegations made by its head of audit, risk and compliance, including that executives ignored her concerns about suspected fraud at RAMS Home Loans franchises and then blamed her for not raising the issues sooner.

Samantha Aitken, Westpac’s current head of audit, risk and compliance, claimed executives ignored her concerns about alleged fraud and criminal activity at some of the franchises of RAMS Home Loans between June 2022 and the start of 2023.

The alleged activity included staged wages, document falsification, self-referral of clients, and using unaccredited or “grey” listed referrers. Westpac closed local RAMS centres last August and no longer accepts new applications for home financing.

Before concerns were escalated to higher-ups, Aitken alleged she warned the managing director of RAMS, Jake Bromwich; then-managing director of mortgages LOB and her immediate manager, Richard Burton; then-group executive of consumer and business banking, Chris de Bruin; and group head of accountability, David Ninnes.

In July 2023, a year after she suspected the fraud, Aitken alleged emails from Ninnes suggested she was “at fault for not identifying and escalating concerns” about RAMS’ risk culture sooner.

In its defence, filed in the Federal Court earlier this month, Westpac claimed that “appropriate steps were taken” with respect to the relevant RAMS franchises and the matters raised by Aitken during the year had been “dealt with and escalated appropriately”.

Responding to the allegation involving Ninnes’ emails, Westpac admitted to there being a meeting between the pair but otherwise denied the allegations in Aitken’s statement of claim.

Some of the alleged complaints were rejected because they “constituted the performance of duties by the applicant in proper fulfilment of her role rather than a complaint or injury to her employment”, and some concerned “a complaint about the conduct of a third party”.

Aitken claimed the conduct of Westpac’s executives meant she was repeatedly “deprecated, disparaged or stigmatised” because she had been labelled a “troublemaker” whose actions improperly, unnecessarily or unreasonably caused damage to Westpac’s business.

In addition to a declaration that Westpac contravened the Fair Work Act and the Corporations Act 2001, Aitken has sought compensation for loss, damage and injury she has suffered as a result.

Executives turn blind eye to fraud allegations, Aitken says

Aitken’s statement of claim, filed last August, made several accusations against high-ranking Westpac executives, particularly around how each responded when approached with her concerns.

In September 2022, Aitken alleged she asked Burton if her team could apply enhanced monitoring protocols to a sample of Westpac’s first-party applications but was denied.

Westpac said Aitken and Burton instead discussed the “most appropriate places” to apply the monitoring protocols, including first-party loans, based on risk. Ultimately, the bank said it determined resources would be applied to RAMS franchisees initially.

Aitken also said she approached Ninnes with a request that a review be conducted into RAMS “for the purpose of uncovering non-compliance with the banking executive accountability regime”.

While Aitken alleged Ninnes declined to do so, Westpac said Aitken had never made the request for the accountability review.

In November 2022, Aitkens alleged she sent a memorandum to Burton that identified 18 franchises she found presented “regulatory, reputational and legal risks” of the bank but was directed by Burton to remove them. Westpac has denied Burton ever did so.

The banking giant denied that Aitken had been dismissed by de Bruin when she requested an independent review into RAMS and disclosed the alleged fraudulent conduct to the board.

After a discussion with Rod Skinner, the then-head of audit and risk, Aitken alleged the concerns were escalated but knocked back by the then-general manager of group audit, Scott Kieran.

According to Aitken’s statement of claim, Kieran allegedly told Skinner he was dissatisfied he had been involved in the matter and that Skinner had put Aitken’s concerns to him in writing.

Westpac said Aitken had told Skinner she did not wish to raise a formal whistleblower complaint and the two agreed that the concerns she raised would be discussed with the head of audit. Westpac said it would otherwise deny the allegations with respect to both men.

Discussions with legal go south, court told

In February 2023, Aitken met with the head of legal of mortgages and RAMS, Helen Van Ravels, to suggest that further information should be provided to an external law firm, including a report and other information produced and maintained by the risk team.

Aitken said she then attended a meeting with general counsel of consumer, business and specialist business Nigel Bond and chief risk officer of consumer and business banking Chris Green, who allegedly informed her they had determined no further information would be provided to the external law firm.

Westpac claimed it was agreed over email that “specific further information” would be provided to the external law firm.

The bank said there are emails where this was confirmed.

HR issues allegedly abound as a consequence

As a result of her whistleblowing, Aitken alleged she was subjected to bullying, was disparaged as a “poor performer”, and received lower financial bonuses than she had in previous years.

On the latter, Aitken claimed Westpac elected not to increase her fixed annual remuneration and awarded her a short-term variable reward bonus (STVR) that was “far less” than the previous year.

While Westpac admitted it did not increase her annual remuneration in 2023, it said the bank awarded Aitken an STVR of $20,000 higher than the previous year “in recognition for the positive risk behaviour she demonstrated in the preceding year”.

The bank said this was proposed by de Bruin in April 2023, and again by Kieran and Burton at the end of the financial year.

As for the suggestions she was a “poor performer”, Aitken claimed she received “negative feedback” in a performance review with Kieran, who told her she was “distracted” for “personal issues” and referenced sick leave and annual leave she had taken earlier.

Westpac referenced Kieran’s notes in the “people leader feedback” section of Aitken’s self-assessment form in which he agreed with her proposed performance rankings and said he was “confident” she would be successful over the next financial year.

Kieran also wrote he had received feedback from Burton “to the effect that the applicant was a strong performer who identified and pushed the RAMS matters to ensure focus on a larger risk issue and embodied drive and a positive speak up culture”.

Westpac otherwise denied the allegation.