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AUSTRAC’s Fintel Alliance has uncovered coordinated mortgage fraud across Australia’s lending sector, and AUSTRAC CEO Brendan Thomas has described the scale of the activity as a wake-up call for every lender.
This month, Colin Dixon is joined by Claire Rees, who spent more than 20 years as head of fraud and financial crime at mortgage providers. They unpack the typologies, the warning signs, and what lenders can do before and after a loan is approved. Legal definitions and available data differ across the UK, Australia and New Zealand, so we’ve kept the discussion high-level.
What AUSTRAC found
AUSTRAC’s Fintel Alliance analysed data from 10 major Australian banks and identified potentially hundreds of millions of dollars in suspected fraudulent loans. AUSTRAC has urged every mortgage lender to examine their mortgage book for signs of fraud.
The typologies will be familiar to anyone in UK lending:
- Inflated income
- False or misrepresented employment
- Fabricated or unverifiable business details
- Offshore or third-party funds used for settlements and mortgage repayments
For Claire, the headlines were no surprise. In the UK, detecting mortgage fraud through shared data has long been business as usual. This is a global problem, not an Australian one.
Why data sharing matters
Data sharing exposes links that stay invisible to organisations working alone. Connections between customers and professionals such as solicitors, brokers, valuers and accountants only emerge across a broader dataset. A pattern that looks isolated at one bank may also be sitting at three others. Viewed in aggregate, it becomes a clear signal.
Stopping fraud before the loan
The best time to stop mortgage fraud is before the loan is approved. Unlike a bank account, a completed mortgage can’t simply be closed and the money returned. Key checks include:
- Validate income, employment and address history. Undisclosed address histories can hide adverse credit history.
- Assess documentation for validity. Check that what’s supplied is genuine and consistent.
- Apply common-sense plausibility checks. Should a 21-year-old builder be earning half a million dollars? If not, investigate further.
First-party fraud is part of the picture too. Research by Cifas, the UK’s fraud prevention service, found that 48% of UK respondents thought it was reasonable to commit first-party fraud, including misrepresenting income to obtain financial products. Tweaking your income to buy your dream home might feel harmless, but deliberately providing false information to obtain lending is fraud. In the UK, £63 million in property fraud was prevented in the last year, and what’s prevented is only part of the picture.
Finding fraud already on your books
Once a mortgage has completed, transaction monitoring gives you valuable insight. Indicators include:
- Overpayments, missed payments or payments from third parties
- A quick onward sale, which may indicate valuation fraud
- Immediate rental, or rental receipts into a residential borrower’s account within three to six months of completion, which may indicate an undisclosed buy-to-let or occupancy fraud
- A change of correspondence address after completion
Each alone might be inconsequential, but early overpayments, third-party payments and a connected solicitor together are far more suspicious. Take a property bought for $1 million and sold for $1.5 million four months later, with the same intermediary and real estate agent and no material improvements. Whether the first valuation was too low or the second too high, it’s worth investigating. And keep reviewing customer risk ratings: low risk at onboarding doesn’t always stay low risk.
Find one case and there are likely others, through connected parties or similar behaviour. Pull each case apart, then use what the data tells you to build transaction monitoring rules and grow your scenario library.
What this means for lenders
AUSTRAC has put lenders on notice, so ignoring the problem isn’t an option. Review your mortgage book, identify existing fraudulent mortgages, and put processes in place to stop more from occurring. You won’t be perfect on day one, so review what’s working and aim for steady improvement.
Mortgage fraud is prevalent in the UK and now visible in Australia. Don’t assume it isn’t happening to you.
This blog is based on the September 2026 episode of ThirdEye View, hosted by Colin Dixon, CAMS-certified AML Solutions Specialist, with Claire Rees, Global Financial Crime Regulatory Specialist at ThirdEye. Colin has been with ThirdEye since its inception in 2012. Claire brings more than 20 years’ experience leading fraud and financial crime teams at mortgage providers.
