1. Mark suspects fraudulent payslips from Vivien for a crucial loan application. 2. Potential confirmation bias; trust in the client may cloud judgment. 3. Legal and ethical obligations mandate accurate information in loan applications. 4. Stephen, Vivien, lending institution, and Mark. Inaction risks reputations and relationships. 5. Uphold integrity, honesty, and fairness in loan applications. 6. Communicate sensitively, empathize, and actively listen. 7. Risk of confrontation or relationship disruption may rationalize inaction. 8. Implement rigorous document verification, proactive communication, and ethical training.
Ethical Framework Analysis
Q1. What are the facts?
Mark, a Finance Broker, suspects fraudulent payslips from Vivien, a client's partner. Both incomes are crucial for a loan, and Mark has not yet submitted the case.
Q2. Potential Biases or Psychological Tendencies:
Confirmation bias may affect Mark's judgment as he knows and trusts Stephen, potentially clouding his assessment of Vivien's payslips. Mark might hesitate to confront the client due to fear of damaging the relationship.
Q3. Legal, Regulatory, or Codes of Practice:
Legal and ethical obligations require brokers to ensure the accuracy of information provided. Submitting fraudulent documents can breach regulations and professional codes of conduct.
Q4. Affected Stakeholders:
Stakeholders include Stephen, Vivien, the lending institution, and Mark. No action could jeopardize the bank, Mark's professional reputation, and Stephen's financial well-being. Taking action may strain relationships but upholds ethical standards.
Q5. Ethical Principles:
Integrity and honesty are paramount. Mark must ensure accuracy and honesty in the loan application, respecting the trust placed in him. Fairness involves treating both clients equally.
Q6. Interpersonal Skills:
Effective communication is key. Mark must approach Stephen and Vivien with sensitivity and empathy, explaining the concern and providing an opportunity for clarification. Active listening is crucial to understand their perspective.
Q7. Rationalizations for Inaction:
Mark may rationalize not acting to avoid confrontation or disrupting the relationship. He might convince himself that the bank statements are sufficient, justifying his decision based on the loan's potential approval.
Q8. Actions for Future Situations:
1. Individual Actions:
- Implement a comprehensive document verification process before submitting loans.
- Establish open communication with clients about the importance of accurate information.
2. Organisational Policies:
- Develop strict protocols for document verification.
- Conduct regular training for brokers on ethical considerations and legal compliance.
In conclusion, Mark faces a critical ethical dilemma where he must balance maintaining client relationships and upholding professional integrity. Clear communication, adherence to ethical principles, and a proactive approach to document verification can guide Mark in handling this situation and shape future practices within the organization.
The complete question is:
Scenario:
Mark is a Finance Broker, assisting his clients, Stephen and Vivien Lee in the purchase of a Sydney CBD apartment. Stephen is a long-term client of Mark, who has provided credit assistance in relation to financing vehicles for Stephen's car rental franchise. Vivien works as a manager in her sister's restaurant.Mark has only met Vivien once before. At that first meeting, Vivien made a good first impression and Stephen considers her trustworthy.
Both Stephen and Vivien's incomes were required to service the new loan. After submitting the loan, while tidying up the hardcopydocuments the Lees had provided him, Mark notices something odd with the payslips from Vivien's job. Mark believes the payslips are fraudulent.
The loan has been submitted, (it has not yet been approved), and Mark believes, from the bank statements provided, there is sufficient income to service the loan.
Mark wonders what he should do.
Using this scenario provided, apply an ethical framework, in written form, incorporating the 8 points listed below.
Q1. What are the facts?
Q2. What are the potential biases or psychological tendencies that may affect the broker's response to the situation?
Q3. What, if any, are the legal, regulatory or codes or practice at issue?
Q4. Who are the affected stakeholders and what impact would this have if no action were taken? And, if action is taken?
Q5. What are the ethical principles at stake?
Q6. What interpersonal skills might the broker need to employ to support a positive outcome?
Q7. Should broker decide to take no action, what reasons and/or rationalisations might he make to justify his decision.
Q8. What could be done differently in future similar situations, including:
1. Individual actions(by the broker)
2. Organisational policies and practices