Your name can become a pattern
Operation Claw 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. AUSTRAC shared the names of individuals and entities potentially involved in submitting false documents with law enforcement and regulators.
A broker who is honest but careless can still end up in that data. If several of your applications share the same odd employer, the same referrer or the same “mystery” source of deposit funds, someone will notice.
Remember
- Repeat use of the same broker is a data point lenders can see.
- AUSTRAC passes names to regulators.
- Honest brokers are protected by good records.
Facts and sources for this part
- The same work 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. [S8]
- AUSTRAC shared the names of individuals and entities potentially involved in submitting false documents in support of loan applications with law enforcement and regulators. [S7]
What lenders are told to look for
AUSTRAC tells lenders to verify identity, employment, income and supporting documentation, to look for common customer details across multiple applications, and to monitor unusual activity involving brokers and other third parties.
It also warns that no single indicator necessarily confirms criminal activity. Indicators should be considered together with what you know of the customer. That works for you too: one odd detail may be fine, but three odd details together deserve a pause.
Remember
- Lenders compare files with each other.
- One red flag is a question; several are a reason to stop.
- Use the same test on your own files.
Facts and sources for this part
- AUSTRAC tells lenders to verify identity, employment, income and supporting documentation, to look for common customer details across multiple applications, and to monitor unusual activity involving brokers and other third parties. [S8]
- AUSTRAC warns that no single indicator necessarily confirms criminal activity, so indicators should be considered together with what you know of the customer. [S8]
Your licensee is watching too
A credit licensee must ensure that its representatives are adequately trained and competent for the credit activities the licence authorises. Licensees have a continual obligation to monitor and supervise their representatives, so the training you do, and the care you take, may be looked at.
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. Your CPD record is part of showing that you stayed alert.
Remember
- Licensees must supervise representatives.
- Training records can be asked for.
- Fraud awareness is part of being competent.
Facts and sources for this part
- A credit licensee must ensure that its representatives are adequately trained and competent for the credit activities the licence authorises. [S3]
- Licensees have a continual obligation to monitor and supervise their representatives so that they stay adequately trained and competent. [S4]
- 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]
A weekly routine that fits a busy broker
Our advice: pick a short checklist and use it on every file. Does the story fit? Do the documents agree with each other? Did I speak to the client on a number I trust? Has any bank detail changed, and did I ring to confirm it? Is any money coming from a third party or from overseas, and do I know why?
Our advice: once a week, look at your own pipeline for repeated names, repeated employers and repeated referrers. If you find a pattern you cannot explain, tell your licensee.
Our advice: if you do make a mistake and a document slips through, tell your licensee at once. The broker who reports early is in a very different position from the one who stays quiet.
Remember
- Use one checklist on every file.
- Look for repeats in your own pipeline each week.
- Report mistakes early.
Check what you have learned
Three questions from the test, each explained. Tap an answer.
Question 1 of 3
What did AUSTRAC do with the names of people potentially involved in false documents?
Show the answer
Right answer: A, Shared them with law enforcement and regulators. AUSTRAC shared the names with law enforcement and regulatory agencies. [S7]
Question 2 of 3
What must a credit licensee ensure about its representatives?
Show the answer
Right answer: A, That they are adequately trained and competent for the licensed credit activities. A credit licensee must ensure its representatives are adequately trained and competent for the credit activities the licence authorises. [S3]
Question 3 of 3
You suspect a payslip is false but the client says “just lodge it, the bank will check”. What should you do?
Show the answer
Right answer: C, Pause, keep the originals and tell your licensee before submitting. The best time to stop mortgage fraud is before a loan is granted, so do not submit what you doubt. [S8]