What the regulators found
- AUSTRAC’s Operation Claw looked at data from 10 major banks.
- It found inflated incomes, false employment and falsified documents.
- ASIC permanently banned an Adelaide broker over false payslips and bank statements for 11 loan applications.
Facts and sources for this part
- AUSTRAC’s Operation Claw found suspected mortgage fraud involving false or misleading information in loan applications, including inflated incomes, false employment, fabricated or unverifiable business activity and falsified or misleading documents. [S8]
- Operation Claw analysed data from 10 major Australian banks and found potentially hundreds of millions of dollars in suspected fraudulent loans, mostly linked to Sydney properties. [S8]
- ASIC permanently banned an Adelaide mortgage broker and cancelled his company’s credit licence after finding he was knowingly or recklessly involved in providing false payslips and bank statements to five banks for 11 home loan applications. [S9]
The tells
- Inconsistent fonts.
- Wrong gross, net, tax or super amounts.
- False or old employer details.
- A staged second income that makes eligibility look better.
Facts and sources for this part
- Lenders reported spotting falsified payslips and statements through inconsistencies in fonts and errors in the gross, net, tax and superannuation amounts, and false or old employer details. [S13]
- AUSTRAC describes wage staging: one employer and income may be genuine, but a second job or income stream is staged to boost loan eligibility, and the bank statements supplied may not have been falsified, which makes it harder to detect. [S13]
Why a clean-looking document is not proof
Documents made with modern tools can look tidy and add up. That is why the check has to move from how a page looks to whether the story fits: does the employer exist, does the pay match the bank credits, and does the income suit the borrower’s life?
Facts and sources for this part
- AUSTRAC describes wage staging: one employer and income may be genuine, but a second job or income stream is staged to boost loan eligibility, and the bank statements supplied may not have been falsified, which makes it harder to detect. [S13]
Before you submit
AUSTRAC says the most effective way to stop mortgage fraud is before a loan is granted. Do not edit a client’s document, keep the originals, and tell your licensee if something does not fit. If a client pushes you to lodge it anyway, that pressure is itself a warning sign.
ASIC has investigated in excess of 100 matters relating to loan fraud, and its bans name brokers who were knowingly or recklessly involved. Carelessness about a document you doubted can carry the same label.
Facts and sources for this part
- AUSTRAC says the most effective way to stop mortgage fraud is before a loan is granted, because once the funds have moved, recovering the money becomes significantly harder. [S8]
- ASIC has investigated in excess of 100 matters relating to loan fraud since it became the national regulator of consumer credit on 1 July 2010. [S10]