NAB calls for National Economic Crime Strategy amid growing mortgage fraud

Ongoing investigations by police, lenders, regulators, and representatives from across the entire financial services, legal, and property industries have revealed growing concerns relating to criminals using artificial intelligence (AI) to fraudulently obtain mortgages that may be ‘washing’ the proceeds of crime through money laundering.

Over the weekend, The Australian Financial Review published a series of reports suggesting that the ongoing probe into mortgage fraud in Australia covers around $4 billion in home purchases, with many of these loans held by major banks such as NAB and the Commonwealth Bank of Australia (CBA).

NAB has now said that it has referred “multiple parties” to the appropriate authorities and “has exited or suspended a number of parties from the bank”.

In a statement issued by NAB over the weekend, the major bank said: “The mortgage industry is contending with a heightened and increasingly sophisticated fraud environment.

“NAB confirms it has been investing significant resources and expertise to fight this threat and taking action.

“NAB has zero tolerance for criminal behaviour and is investing heavily to respond. We are identifying and disrupting this activity, with more to do as a bank and across the industry.

“NAB has referred multiple parties to the appropriate authorities and has exited or suspended a number of parties from the bank.

“We will continue to take an uncompromising stance on anyone who engages in illegal or unethical behaviour.

“This is complex, organised crime that spans industries and borders.”

However, the bank said that the risks were not confined to any one institution or to just banks.

It said: “Brokers, real estate agents, lawyers, accountants, conveyancers, and other industries that support mortgage lending are facing the same threat from corrupt professional facilitators and organised crime.”

While NAB said it was working closely with peers through the Fintel Alliance and directly with law enforcement to share intelligence and strengthen the collective response, it added that “industry efforts alone are not enough”.

As such, it is now calling for the development of a National Economic Crime Strategy.

“This will develop a co-ordinated national approach to better protect Australian customers, industry, and the broader economy, by enabling stronger intelligence sharing, deeper cross-sector collaboration, and more consistent regulatory settings to fight economic crime at the source,” it said.

“Tackling this threat effectively requires a step change in how banks, regulators, law enforcement, and government work together. Without it, we risk focusing on individual cases while the global networks behind them continue to operate.

“This is a system-wide problem, and it requires a system-wide response.”

What is being done about mortgage fraud?

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is working with major banks, law enforcement, and other regulators to map the extent of increasingly complex loan scams throughout the sector.

The mortgage fraud issue first came to light in media reports at the beginning of the year, and the scale of the mortgage fraud problem has been growing rapidly, as more information is uncovered.

AUSTRAC CEO Brendan Thomas told The Adviser in March that the watchdog was assessing how widespread mortgage fraud had become, after revelations that a sophisticated syndicate may have secured billions of dollars of home loans using falsified documentation.

Several arrests – including former bankers, brokers, lawyers, and accountants – have also been made.

Between June and September 2025, National Australia Bank had suspended 15 brokers associated with the group, including Andrew Hu, a former NAB and CBA banker who later operated under Hai Money’s credit licence and has since been charged with 89 offences connected to the alleged Penthouse Syndicate fraud scheme.

Meanwhile, it is believed that members of the broking industry – including associations and aggregators – are working in an introducer and referrer working group, bringing together major banks and aggregation groups to address fraud risks in this part of the system.

Push to expand data access through CDR

To try and counter the fraudulent documentation problem, peak industry bodies wrote to Treasurer Jim Chalmers in April, calling for the Consumer Data Right (CDR) to be expanded to include Australian Taxation Office income data and structured ASIC registry information.

The open letter was penned by the Australian Banking Association, and co-signed by other finance associations, including the Mortgage and Finance Association of Australia, the Customer Owned Banking Association, the Australian Finance Industry Association, and Fintech Australia.

It said that secure, consent‑based access to “points of truth” such as notices of assessment and company records would allow lenders to verify borrower income and ownership structures directly against government sources, rather than relying on documents supplied by applicants.

The groups said this shift would help financial institutions spot AI‑generated payslips and forged financial statements, better detect complex or fast‑changing corporate structures, and reduce the risk that organised crime groups could move between banks undetected.

The government confirmed in the federal budget that it would be setting aside fresh funding and policy measures for the Consumer Data Right (CDR), including plans to explore sharing certain ATO‑held data.

The government said it would test whether using CDR alongside Digital ID could better protect renters’ personal information and make rental applications easier.

To fund that next phase, the government allocated $62 million over two years from 2026–27 to broaden participation in the CDR and investigate how ATO data could be brought into the system.

[Related: Calls mount to use ATO data in open banking to reduce fraud risk]