AI-altered payslips and fake gifted deposits among red flags banks are seeing
Mortgage advisers are being urged to look beyond paperwork that seems to add up, as complaints of mortgage fraud climb, according to a new Knowledge Hub article from NZ Financial Services Group (NZFSG).
The aggregator stresses that advisers don’t need to treat every borrower with suspicion. Instead, they should test whether the information across a file fits together.
“An inconsistency doesn’t mean fraud has occurred. It means there’s another question to ask,” NZFSG said.
The Financial Markets Authority (FMA) dealt with about one mortgage fraud complaint a year before 2023, rising to seven in 2024 and 21 in 2025.
Fraud that passed the paperwork test
Serious Fraud Office (SFO) cases cited by NZFSG show how convincing a fraudulent application can be. In a case that ended in guilty verdicts in 2022, two Auckland couples used fake employment agreements from a non-trading company and shuffled money between their own accounts to mimic regular salary payments. The documents and bank credits matched, and 14 applications secured $8.7 million in lending.
In August 2026, the SFO also charged two women over an alleged scheme involving nearly $5 million in mortgages secured against properties belonging to people whose identities had allegedly been stolen.
The tactics on lenders’ radar
NZFSG says banks are identifying several types of suspicious activity. These include documents altered with AI and digital editing tools, which can make fake payslips and bank statements hard to spot by eye. They also include gifted deposits propped up by false or inflated valuations, and properties on-sold before the original purchase settles, sometimes at a sharply higher price.
“A document looking genuine isn’t the same as the information being genuine,” the guide warns.
Income that won’t reconcile across payslips, bank credits, and tax records should prompt a closer look. So should employers that can’t be independently confirmed, deposits with no clear source, and unusual pressure to get an application submitted.
The FMA has circulated its own red flags list to mortgage aggregators, adviser associations, and lenders. Its Financial Conduct Report 2026/27, released in June, lists fraud detection and prevention among its priorities and notes active investigations into alleged mortgage fraud.
NZFSG’s advice for advisers is simple: “Stop. Ask. Verify. Record. Escalate.” That means checking key details against independently sourced information, keeping a record of any discrepancy and the client’s response, and escalating unresolved concerns through compliance before an application goes further.
Technology in focus
NZFSG is also putting technology front and centre. Its second Bounce Roadshow of 2026 will look at how technology and AI are reshaping advice, with registration through MyHub and event details on NZFSG’s website.
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