Results of investigation into revised mortgage advice announced

Press release -

Frans van der Horst en Wies Wagenaar

ABN AMRO is today announcing the results of the investigation into why employees copied signatures in revised mortgage advice reports. Frans van der Horst, CEO of ABN AMRO Retail Banking, and Wies Wagenaar, Head of Conduct, who is in charge of the inquiry, discuss the results of the investigation.

All mortgage advice reports are submitted to an internal quality control desk. This additional quality control is carried out after the mortgage advice report has been signed by the client. The signed report is used as the basis for completing the mortgage offer and executing the mortgage deed in accordance with standard procedure and applicable rules. 

In some cases, the mortgage advice report initially provided and signed for approval by the client is incomplete, or the motivation for deviating from the client’s choices has not been properly documented. In these cases, the advisor is required to revise the advice report, share it with the client and obtain the client’s signature once again.

Frans, why was this investigation necessary?

‘In November, we announced that ninety mortgage advisors had copied signatures in revised mortgage advice reports. Now that we have thoroughly investigated this matter, it appears that a total of 114 of the more than 850 advisors copied signatures. In the period that this took place, between 2013 and 2016, a total of 47,826 mortgage advice reports were given to clients. Of these, 9,900 reports were later revised and in around 700 of these cases a copied signature was found in the file. In only three individual cases, the client suffered a (very low) financial loss. This involved less than EUR 1,000 in total, which has since been compensated.

‘While investigating the facts, we saw reason to look more closely at how this could have happened. We wanted to understand everything, so that we can prevent this from happening again in the future. Wies Wagenaar, our Head of Conduct, conducted this inquiry and can say more about it.’

Wies, how did you carry out this investigation, and what did you discover?

‘Experts from Compliance, Audit and Operational Risk, together with the conduct experts in my team, performed this investigation. The conduct experts specialise in investigating why good people make the wrong choices in certain tricky or complex situations. Copying signatures is never allowed, of course, and these mortgage advisors knew that.

‘The project team interviewed a total of 230 employees from various departments who were involved in the mortgage process. We also held a survey which was completed by around 500 employees who were involved in the mortgage process. The team performed data analyses, examined files and looked on while mortgage advisors around the country did their work. This gave us an in-depth picture of the entire mortgage advice procedure – and that’s an extremely complex process.

‘In summary, we found three main reasons for how this could have happened. ‘

First, the process of compiling a complete and suitable mortgage advice report is very complex. It involves many different parties within the bank and many steps and checks. From 2013 to 2016, advisors worked with an IT system that did not provide optimum support and the systems were not always compatible with each other. As a result, they often had to solve things manually, causing delays in the process. At the same time, advisors always want to help their clients as efficiently as possible by providing good, comprehensive advice.

‘A second factor was how these employees were managed. Due to reorganisations being carried out at the time, some of the advisors did not have a manager or had several different managers in a short period of time. This made it hard for them to discuss specific cases, which would have been useful as there were many changes to mortgage legislation and policy during this period. Mortgage advisors also worked with targets and quality requirements. If you failed to meet the targets or requirements, you dropped down a level in the performance lists. The reorganisation made mortgage advisors feel uncertain about their future.

‘Third, the culture influenced the advisors’ behaviour. We have established that the signals sent out by mortgage advisors didn’t always reach the management. That was because several parties were involved and there was not one specific person responsible for the entire mortgage advice process. There was also too much distance between the employees who designed new mortgage policies and the developers of the IT support systems on the one hand and the advisors who have to work with these policies and systems on the other.

‘These three factors combined put a lot of pressure on advisors – and they felt that. In almost all of these cases, the subsequent quality control resulted in a change that had little or no impact on the client. Many of these clients had already moved house, and some of them didn’t want to sign the report or were unable to be reached. In combination with delays in providing an advice report in the first place, advisors were reluctant to bother the client for a signature. In the meantime, the advisor could not complete the file without a signature, meaning he or she did not meet the quality requirements.’

Frans, what do you think about these conclusions?

‘Let me start out by saying that every copied signature is one too many – it’s unacceptable. But given how complex we have made this procedure for our people, I do understand the difficult position we have put them in. As an organisation, we too are at fault.’

Is that part of the reason why not all of the advisors involved were dismissed?

‘Yes, although some advisors were dismissed. Most were reprimanded and had to give back their performance-related payment. Some were suspended from their duties, and notes were made in personnel files. In general, people do not have the feeling that the sanctions imposed were not serious enough. Overall, this has taken a heavy toll on the employees involved and on our organisation.’

Have sanctions only been imposed on the mortgage advisors involved, or have any of their managers suffered consequences?

‘Yes, we have made changes to the management – meaning managers, too, have suffered consequences. But I won’t discuss individual cases or names.’

And how will you make sure this doesn’t happen again?

‘One of the most important changes we’ve made is that we have stopped conducting quality controls after the client has signed the report and the mortgage deed has been executed. We now do this before the deed is executed. And no changes may be made to the advice policy, procedures or systems without first obtaining input from the advisors who work with them. If they say that the change is unrealistic, we need to find a better solution. We have also made one department responsible for the entire mortgage policy, rather than this being divided over several teams. Another important change, which I am personally promoting, is more openness in the organisation so that we talk more with one another about our culture and the pressure our colleagues experience. I will continue to raise this issue in my own team and when I visit the branches and other departments. I want us to start an open dialogue, so that this doesn’t happen again in the future.’

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