Mortgage Fraud in Australia — How to Spot and Report It (2026)

Updated

Mortgage Fraud in Australia — How to Spot and Report It (2026)

Mortgage fraud is a serious criminal offence in Australia. It involves the deliberate misrepresentation of financial information to obtain a home loan under false pretences. It causes significant harm to lenders, innocent property buyers, and the broader housing market.

Types of Mortgage Fraud

1. Income and Employment Fraud

The most common type. Involves providing false or inflated income documentation:

  • Fabricated payslips or employment letters
  • Overstated self-employment income
  • Undisclosed additional liabilities
  • False employment confirmation

The risk to the borrower: Using false documents to obtain credit is fraud under the Crimes Act 1900 (NSW) and equivalent state legislation, and under the Criminal Code Act 1995 (Cth) for offences involving Australian financial institutions. Penalties include imprisonment.

2. Identity Fraud

Someone uses your identity (without your knowledge) to apply for a mortgage. This can occur through:

  • Data breaches exposing personal information
  • Stolen mail or documents
  • Social engineering of identity information

Signs on your credit file: unexpected credit enquiries, unfamiliar loans or accounts, an address you don’t recognise. Get your free credit report annually to check.

3. Property Valuation Fraud

Artificially inflating property valuations to increase borrowing against a property. Methods include:

  • Coordinating with a corrupt valuer
  • Providing false comparable sales data
  • Dummy sale arrangements (related-party sales at inflated prices)

4. Straw Borrower Arrangements

A “straw borrower” applies for a loan using their own identity but for the benefit of another person who could not qualify. This is fraud — both parties can be prosecuted.

5. Deposit Fraud / False Gift Letters

Claiming a deposit came from genuine savings or a genuine gift when it was actually a loan from a third party — disguising the true nature of the deposit to meet lender requirements.

Warning Signs — When You Might Be a Victim or a Target

Signs you may be a victim of identity fraud:

  • Unexpected entries on your credit file (enquiries, accounts)
  • Receiving loan statements for loans you never applied for
  • Being contacted by a debt collector for an unknown debt
  • Being denied credit for unknown reasons

Signs a third party may be trying to use you fraudulently:

  • Being asked to sign documents you don’t understand or haven’t seen the full context of
  • Being offered a “fee” or commission to be on a loan application
  • An adviser or broker rushing you through paperwork without explanation
  • Being asked to overstate your income or understate your liabilities on a form

How to Report Mortgage Fraud in Australia

ASIC (Australian Securities and Investments Commission): Report fraud involving mortgage brokers, lenders, or financial services providers.

  • Online: asic.gov.au (Report a concern)
  • Phone: 1300 300 630

Australian Federal Police (AFP): For large-scale or sophisticated mortgage fraud schemes.

  • Online: afp.gov.au (Report cybercrime / financial crime)

Your state or territory police: For identity fraud and local criminal matters.

Your lender: If you believe your identity has been used by a third party to obtain a mortgage with your lender, contact the lender directly and notify them immediately.

Credit bureaus: If identity fraud is suspected, request a credit ban (formerly called a credit freeze) from the credit bureaus — this prevents new credit being issued in your name without a specific process.

If You Are Asked to Misrepresent Your Finances

Do not do it. No matter how a broker, adviser, or third party frames it (“everyone does this,” “it’s just how applications work,” “we’ll fix the numbers”), submitting false financial information on a credit application is fraud. You are personally liable for what you sign.

If a broker or adviser pressures you to misrepresent your income, employment, or liabilities:

  • Refuse
  • Document the pressure (in writing if possible)
  • Report to ASIC and AFCA

Frequently Asked Questions

I think my identity was used to take out a mortgage. What do I do immediately?

  1. Contact your bank and all major lenders to alert them
  2. Request your credit report from all three bureaus (Equifax, Illion, Experian)
  3. Contact IDCARE (Australia’s identity and cyber support service — idcare.org) — free, specialised support
  4. Report to state/territory police and the AFP for financial identity fraud
  5. Contact Services Australia if government records may be affected

Can I be prosecuted for fraud even if I didn’t fully understand what I was signing?

Intent matters in criminal fraud — if you genuinely did not understand that information was false, this is a relevant consideration. However, if you had reason to know the documentation was fabricated, or were willfully blind to obvious falsity, this is far more serious. Never sign documents you do not understand.

This article provides general information about mortgage fraud in Australia. If you believe you are a victim of fraud or have observed fraud, report to ASIC and police immediately. Find resources through MoneySmart and IDCARE at idcare.org.