Doctored payslips, statements and employer letters.

What AUSTRAC found

AUSTRAC’s 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.

The suspected fraud involved false or misleading information in loan applications, including inflated incomes, false employment, fabricated or unverifiable business activity and falsified or misleading documents. It also found offshore or third-party funds used for settlements or mortgage repayments, and the repeated use of the same brokers, accountants or law firms across applications.

Which brokers have been banned, and why

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.

In another case, ASIC permanently banned three Sydney mortgage brokers over false employer letters or payslips given to a bank to support 21 home loan applications. The customers were not employed by the companies named, the payslips showed income much greater than their real incomes, and the bank financed over $17M of loans in reliance on false documentation.

Notice the words “knowingly or recklessly”. A broker does not have to forge a document to be caught. Passing on a document you had good reason to doubt can be enough.

How forged income documents get spotted

Lenders have reported that falsified payslips and statements gave themselves away through inconsistencies in fonts and errors in the gross, net, tax and superannuation amounts. False or old employer details were also common features of fraudulent applications.

Wage staging is harder. AUSTRAC describes cases where one employer and income may be genuine, but a second job or income stream is staged to boost loan eligibility. The bank statements supplied may not have been falsified, which makes it harder to detect.

AUSTRAC’s 2021 assessment of non-bank lenders also noted several identified cases of brokers submitting fraudulent loan applications with falsified documentation.

When the document looks perfect

Our advice: do not rely on how a page looks. Documents made with AI tools can have clean fonts and sums that add up, so the old tells are no longer enough on their own.

Our advice: check the story instead. Does the employer exist and trade? Does the pay in the payslip match the credits in the bank statement, week after week? Is the same employer, address or phone number showing up on other files you have seen? Does the income fit the job, the suburb and the age of the borrower?

Our advice: if something does not fit, ask for another source (a tax record, an employer call to a number you found yourself), and write down what you asked and what you got.

When you are suspicious, what next?

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.

Our advice: do not fix, replace or “tidy up” a document yourself, and do not tell the client how to get past the lender’s check. Follow your licensee’s process for suspected fraud, keep the original documents and the emails, and tell your licensee before you submit.