AUSTRAC Orders Audit For AML/CFT Compliance Gaps Of Mercedes-Benz Financial Services

AUSTRAC has appointed an external auditor to Mercedes-Benz Financial Services Australia after demonstrating concerns about the financier’s compliance with the AML/CTF Act.

Mercedes-Benz Financial Services has also been offering automotive financial services and insurance to customers. Serious concerns included believing that most customers were low-risk, a lack of strategies to identify and report suspicious activity, and insufficient transaction monitoring.

AUSTRAC CEO Brendan Thomas said the non-bank lending sector is supposed to ensure that they have the resources, processes in place to comply with their AML/CTF obligations. This led to raised concerns about the other non-banking lending and financial sectors at the same time.

The evaluations of AUSTRAC in the non-bank lending and financing sector simply assisted in revealing extensive under-reporting of suspicious matters.

The AML audit findings will result in helping Mercedes-Benz strengthen its compliance responsibilities and let AUSTRAC know whether or not more regulatory actions are necessary.

There are almost 90 percent of the non-bank lending and financing sector that did not report a single suspicious matter to AUSTRAC in 2024. Furthermore, there were just two businesses that were held responsible for the reports submitted in 2023 and 2024.

AUSTRAC is aiming to crack down on a wider scale for the non-bank lending sector, which includes mortgage providers, personal loan providers, equipment financing, vehicle financing, and leasing, too.

“Our concerns extend beyond just one business,” Thomas mentioned. “The gaps are there, but the sector isn’t attuned to the risks. No business is devoid of risk. With such low reporting rates, the full picture of potential criminal exploitation remains hidden.”

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AUSTRAC also helped in revealing the issues coming from non-reporting and under-reporting, and raising concerns about the sector’s ability to identify and manage the high-risk customers effectively.

This kind of evaluation gives the opportunity to directly engage with companies, and it helps in navigating their flaws respectively. The companies are fast to respond, and AUSTRAC anticipated this to happen more extensively throughout the industry.

AUSTRAC is going to keep a close eye on the suspicious matter report submissions to evaluate the response and compliance advancements of the industry.

Reportedly, AUSTRAC warns that current AML/CTF efforts in non-bank lending are insufficient. Rapid improvements are essential to prevent criminal exploitation.