Westpac CEO says mortgage fraud more ‘sophisticated’ due to brokers

His remarks followed evidence from Australia and New Zealand Banking Group (ANZ) chief executive Nuno Matos, who told Thursday’s (12 November) hearing that most mortgage fraud uncovered in the bank’s review had entered through the broker channel.

Miller said borrowers seeking finance through misleading information remained a longstanding challenge, but linked greater sophistication to alleged broker involvement.

“Again, the idea that someone misrepresents so that they can get a loan or a larger loan has been a challenge for the banks forever, and it is a bit more sophisticated now with the brokers,” he said.

He separately pointed to brokers’ expanding position in mortgage distribution as a reason lenders were watching for intermediary participation in fraudulent applications.

“The other risk that has emerged over the last few years is clearly with the broker having such a more significant role in the ecosystem, brokers facilitating or colluding with that kind of activity is something that we are cautious of,” he said.

However, Miller’s assessment extended beyond intermediaries, with borrowers’ access to increasingly sophisticated tools also complicating banks’ efforts to verify financial claims.

“So in the context of mortgage fraud, the idea that a borrower misrepresents their income or their serviceability or their net wealth is a risk banks have been navigating for 1,000 years. Clearly, it’s more sophisticated now with all the tools that people have at their disposal,” he said.

Miller’s comments come as major lenders face scrutiny over suspected fraudulent lending and the safeguards applied across broker, introducer and proprietary channels.

The broader mortgage fraud saga emerged in February after the Commonwealth Bank of Australia (CBA) reported approximately $1 billion in potentially fraudulent mortgages to authorities, with concerns encompassing broker and introducer lending.

Subsequent reporting has put suspected exposure across Australia’s five largest banks at around $4 billion.

Findings from AUSTRAC’s Operation Claw pointed to vulnerabilities involving several professions, rather than a single distribution channel.

Operation Claw analysed information from 10 banks and identified potentially hundreds of millions of dollars in suspected fraudulent loans, predominantly connected to Sydney properties.

Recurring indicators included misleading documents and the repeated involvement of brokers, accountants and law firms.

AUSTRAC referred 200 brokers, accountants, solicitors and other professionals to law enforcement and regulatory agencies, including the Australian Securities and Investments Commission (ASIC), the Australian Taxation Office (ATO) and the Tax Practitioners Board, for intelligence purposes.

The financial crimes agency also revealed that certain accounting firms offered document fabrication “as a service”, creating fake payslips, tax returns, and shell companies to substantiate inflated incomes.

For example, Australian Federal Police arrested and charged Melbourne accountant Qi Gao in April 2026 over alleged irregular loan activity.

Bank-side collusion and income verification in focus

Miller acknowledged that misconduct could also involve someone within a lender, describing internal-external collusion as an enduring exposure despite his confidence in Westpac’s safeguards.

“The third area, which is the one that we work hard on, and is a priority across the industry, is, is there any collusion between someone inside the company and that person outside the company,” he said.

“We think we’ve got that very well controlled, but given human nature, someone could and may attempt to perpetrate a fraud with connection inside the company? That’s a risk that we’re running all the time.”

On prevention, he outlined Westpac’s push for direct access to ATO information to strengthen income verification.

While Miller downplayed internal wrongdoing at Westpac, police and banks have also uncovered insider collusion elsewhere.

In May, NSW Police arrested a former bank business development manager for allegedly using insider knowledge of bank fraud-detection systems to push tens of millions of dollars in sham loans for an organised crime syndicate.

The Finance Brokers Association of Australia (FBAA) has also urged banks to scrap introducer programs entirely, warning that they serve as unmonitored entry points for document fraud and money laundering.

“I think importantly, one of the things that we’ve been advocating for is direct access to ATO data because most commonly the challenge has been some misrepresentation of income. So being able to go to a golden source of truth through ATO data would help reduce fraud risk across the industry,” he said.

His comments coincide with the Mortgage and Finance Association of Australia’s (MFAA) call for relevant ATO information to be incorporated into the Consumer Data Right (CDR).

Miller also detailed increasing cooperation aimed at preventing individuals identified over misconduct from moving between lenders or broker businesses.

“The industry is increasingly working in a coordinated fashion with support of our regulators around bad actors being identified and therefore not able to shop between different institutions or different practices in the broker community,” he said.

Falling prices fail to relieve borrowing pressures

The hearing also examined housing demand, with Liberal MP Simon Kennedy questioning Miller about government spending and tax settings, inflation, interest rates and property prices.

Miller agreed that higher financing costs following five rate rises this year had neutralised the affordability benefit of lower house prices.

He reported little improvement in new-dwelling construction despite negative-gearing changes retaining concessions for new developments to encourage supply.

Miller revealed that Westpac supported approximately 8,000 new apartments and townhouses in 2025, compared with 5,300 this year, a reduction of around 30 per cent.

National Australia Bank (NAB) chief executive Andrew Irvine, meanwhile, reported declining mortgage applications and settlements, attributing the slowdown to household pressures, rising interest rates and weaker confidence following tax changes.

“Our mortgage lending applications and settlements have fallen this year. I think it’s driven by a number of factors, cost of living, fuels crisis, interest rates, and also I do believe the tax changes did have an impact on buyer confidence,” Irvine said.

“When you have house prices falling and they’re falling by 8 per cent to date, I think any thoughtful buyer of a property is going to wonder, is this a good time to enter the market.

“And our view is that you won’t see buyers kind of come back in at scale until we hit a floor, which we anticipate being sometime next year.”

Irvine described differing experiences across NAB’s customer base, with some households facing increasing pressure on their finances.

“Many of our customers are managing, but others are finding it tougher. Families are watching household budgets closely,” he said.

Despite softer mortgage activity, he said NAB was pursuing expansion in customer-facing roles, including bankers originating home loans directly.

“We want more bankers, we want more personal bankers, more proprietary mortgage bankers, we want more business bankers. So there are lots of areas of our bank where we’re seeking to expand the size of the workforce,” he said.

That recruitment ambition aligns with NAB’s strategic priority to build out priority origination, with direct channels at the bank now accounting for 52.5 per cent of new mortgage flows in 2H26, the highest in recent history.

NAB’s ambitions place it alongside Westpac, ANZ and the Commonwealth Bank of Australia (CBA), which have also prioritised lending through their own channels.

[Related: New home loans suffer largest drop on record]