The old warning signs are no longer enough to catch AI-enabled mortgage fraud, says BOQ's Karen Carter
Most brokers are very good at knowing when something feels off. The challenge is that fraud is getting harder to spot at first glance. AI has lifted the quality of what fraudsters can produce, so brokers need to rely less on whether a document looks right and more on whether the deal makes sense.
The old warning signs are not always there. A false payslip, altered bank statement or fake accountant letter can look clean, consistent and convincing. A polished document is not the same as a verified document.
For brokers, this is close to home. You are often the first person to meet the customer, collect the information and hear the story behind the deal. That puts you in a strong position to spot when something does not add up before it becomes a bigger issue for the customer, the lender and your own business.
It is no longer just about spotting a fake document
Fraud used to be easier to pick up when the paperwork was messy. Poor formatting, spelling mistakes or numbers that clearly did not match were obvious signals. That is no longer enough. Fraud may now arrive as a polished document pack, a professional email, or an instruction that appears to come from someone familiar and verified by an accountant.
That means brokers need to check the story, not just the paperwork. Does the income make sense? Do the bank statements line up with the trading history? Does the customer understand the structure? Is the third party genuinely independent? If the answer is unclear, it is worth slowing down.
The risks showing up across the market are broad: identity takeover, altered or AI-generated income documents, payment redirection, impersonated instructions, social engineering and fraud involving third parties. In commercial lending, the risk can be harder to see because there are often more moving parts, more advisers and more documents in play.
Why this matters for brokers
Catching bad actors is a shared responsibility across the industry – brokers, aggregators and lenders alike. As the first point of contact, brokers are well placed to know their customer, understand the transaction and ask questions when something feels off. The risk is not only the loan outcome. Fraud concerns can affect lender relationships, aggregator standing, accreditation and reputation.
One area that deserves more attention is role confusion. If the same person is acting as accountant, adviser, referrer or key contact for the customer, it becomes harder to rely on the independence of the information. The same applies where the customer is not answering basic questions themselves, or where a third party appears to be driving the process.
Most fraud does not start with something dramatic. It starts with a story that almost makes sense: a rushed settlement, a supplier account change, a document that arrives late, a new adviser, or a customer who cannot clearly explain their own business. One issue may be innocent. A pattern should make you pause.
Practical red flags for broker businesses
- Documents that look a little too neat: clean formatting is not proof. Check where the document came from and whether the numbers reconcile.
- Numbers that do not line up: income, BAS, tax returns, bank statements, leases, contracts and company searches should all tell the same story.
- Know your customer: where did this customer come from? Are they an existing customer, a trusted referral, or someone who has come in cold? If they have walked in off the street or arrived through an unfamiliar source, spend more time understanding who they are, why they chose you and whether the story stacks up.
- Pressure to hurry: urgency is often used to stop people asking the right questions.
- A third party doing all the talking: if the customer cannot explain the deal, structure or purpose of the lending, slow down.
- Changed payment or settlement details: verify changes using a trusted phone number or contact method, not the details supplied in the request.
- Different communication patterns: new email addresses, new phone numbers, unexpected links or unusual instructions should all be checked.
- Conflicted roles: be careful where an adviser, accountant, referrer or introducer may also have a financial interest in the transaction.
A simple rule: pause, question, verify
Pause when something does not feel right. Good brokers do not ignore their instincts. If the behaviour, document trail or transaction structure feels unusual, take the time to understand why.
Question the story, not just the paperwork. Ask why the customer needs the finance, who is involved, where the information came from and whether the deal makes commercial sense.
Verify through sources you trust. Use known phone numbers, independent records and lender escalation channels. Do not rely only on the information supplied in the file if something is not sitting right.
Protecting your own brokerage
This needs to be a business discipline, not just something that happens at lender assessment. Brokerages should have strong email security, multi-factor authentication, clear approval rules for payments and a firm process for checking any change to client, supplier or settlement details.
Be clear with your team on the basics. Do not click unexpected links. Do not accept document packs without understanding where they came from. Do not let resourcing pressures or busy periods become a reason for surface-level checks. And do not let a strong client relationship replace verification.
The best way to build this muscle is through real examples. Talk as a team about what looked unusual, what question should have been asked, when the matter should have been escalated and what you would do differently next time.
Trust is still the broker advantage
Fraud prevention can feel like friction, particularly when customers want quick answers and brokers are trying to keep deals moving. But taking the time to verify information protects the very thing brokers trade on: being trusted.
As AI-enabled fraud becomes more sophisticated, the industry will need better tools, the ability to share fraud intelligence and emerging risk indicators within appropriate legal and privacy frameworks, and clear escalation pathways. In the meantime, brokers can do a lot by staying curious, asking one more question and being prepared to pause a file that does not make sense.
The fastest broker is not always the best protected. In this environment, the brokers who stand out will be the ones who know when to slow down.
Bank of Queensland Limited ABN 32 009 656 740 AFSL and Australian Credit Licence Number 244616
