Referral relationships can’t be set and forget amid heightened fraud concerns as peak broker association lays out guidance for mortgage professionals
Australia's mortgage industry has spent 2026 learning how much damage can walk in through the front door.
Suspected fraudulent home loans tied to broking and referral channels have been reported at around $3 billion, brokers and a solicitor have been charged, and the Australian Securities and Investments Commission (ASIC) has put lenders' use of referrers on its review list.
It’s in this environment that the Mortgage & Finance Association of Australia (MFAA) has released a released referrer risk management guidance setting out how brokers, aggregators and lenders should vet, monitor and, where needed, cut ties with the people who send them clients.
The document, Referrer Risk Management Guidance: Standards for Management of Lending Referral Relationships, was developed by the MFAA's Fraud and Referrer Working Group with input from major aggregators and lenders. It covers referrer due diligence, customer transparency, red flags, escalation and record keeping, and includes a template referrer register.
Why referral channels are under the microscope
Referrals are a significant source of broker business. Research by Deloitte for the MFAA's Value of Mortgage and Finance Broking 2025 report found referrals accounted for 40% of business leads reported by surveyed brokers, including leads from existing clients and third-party referrers, according to the MFAA.
They have also become a pressure point. In March 2026, Commonwealth Bank raised concerns about compliance failures and potential fraud in its introducer program – which pays real estate agents, accountants and other professionals a commission for referring clients – as more lenders were drawn into the escalating home loan fraud scandal across major banks.
In September, ASIC announced it would review how lenders use referrers and oversee brokers under its 2026-27 banking sector priorities, with work expected to begin in the third quarter of the 2026-27 financial year. ASIC has not said which lenders will be examined or how it will define "referrers".
MFAA chief executive Anja Pannek (pictured, right) welcomed that review at the time. "As we saw during the Banking Royal Commission, large-scale referrer programs, particularly where there is inadequate due diligence, monitoring or oversight, can create significant vulnerabilities and avenues for fraud and poor conduct," she said.
Peter White, then chief executive of the Finance Brokers Association of Australia (FBAA), went further, arguing that banks should scrap their referral programs entirely to fight fraud.
A channel-agnostic approach to referrer risk
The MFAA's guidance stops short of that. It treats referral relationships as legitimate, applies equally to broker, aggregator and lender or direct channels, and does not create new legal obligations or Aggregator Assurance Program requirements. The association said it would give industry roughly six to 12 months to put the guidance into practice before considering whether any part should be strengthened.
"Trust is what our financial system runs on, and fraud anywhere along the lending chain has the potential to undermine trust everywhere in it. Protecting that trust is a collective responsibility," Pannek said. "No single part of the ecosystem can address these risks alone. Our response has to follow the conduct and the evidence, rather than begin with assumptions about where the risk sits."
Naveen Ahluwalia (pictured, left), the MFAA's executive, policy and legal, said the goal was not to discourage referrals. "Legitimate referral arrangements are an important part of the lending value chain. Our aim is to help businesses better understand who they are dealing with, recognise potential warning signs and respond appropriately when concerns arise," Ahluwalia said.
Where does a referral end and shadow broking begin?
The most practical part of the guidance for brokers is a three-stage test for shadow broking – also called proxy broking – where an unlicensed person performs some or all of a broker's role while relying on someone else's licence, accreditation or systems. Under the National Consumer Credit Protection Act 2009 (NCCP Act), referrers can only operate without a credit licence if they stay within a narrow exemption that is largely limited to introductions.
At the ordinary end of the scale, a referrer tells a customer a broker may be able to help, passes on contact details with consent, forwards a document the customer has asked to be sent, or follows up to check the customer was contacted.
The guidance then lists warning signs: the referrer stays closely involved after the introduction, application documents come mainly from the referrer rather than the customer, the referrer offers views on which lender or product to choose, or the customer seems rehearsed and cannot explain their own application.
At the heightened-risk end, the referrer controls customer contact and the broker has little or no direct engagement, the referrer prepares application material that the broker simply submits, or the referrer directs lender choice and coaches the customer on what to say.
The MFAA cautions that a single warning sign does not prove shadow broking, and that any assessment should rest on the substance of what is actually happening. Broker-to-broker referrals are covered too – a receiving broker should not rely on the referring broker's enquiries or documents, and any referral fee or commission split should be disclosed to the customer.
The approach echoes advice from AFG's general manager – aggregation Christa Malkin, who told MPA in May 2026 that culture matters more than technology in fighting mortgage fraud. "It's absolutely about knowing who you're dealing with and never taking, irrespective of the relationship that you have or you think you have, never taking that for granted," she said.
Download the entire MFAA Referrer Risk Management Guidance now.
