Australia’s housing market riddled with fraudulent loans worth hundreds of millions of dollars
Australia’s financial watchdog has found loans worth hundreds of millions of dollars were fraudulently claimed through applications with fake jobs and salaries.
Analysis of data from 10 major banks reportedly found that loans linked to properties in Sydney were obtained through inflating incomes and falsely claiming employment to businesses that were either fabricated or unable to be verified, AUSTRAC said in a statement released on Wednesday.
The financial watchdog has found loans worth hundreds of millions of dollars were fraudulently claimed through applications with fake jobs and salaries. Domain
The alleged fraud is rife throughout Australia’s property industry, the watchdog claims, with data uncovered by Operation Claw showing the activity was not limited to one lender or borrowing group.
“The scale of this activity should be a wake-up call for every lender,” AUSTRAC CEO Brendan Thomas said.
“The same warning signs were found across banks that together cover the vast majority of Australia’s mortgage market,” he added, warning that it proves the system could be easily exploited by criminals, including for money laundering purposes.
AUSTRAC believes the fraudulent loans enabled mortgage repayments to be made, or to complete property settlements.
The potential fraud is widespread and not limited to one bank or lender, the financial watchdog found. Supplied
The watchdog believes there were warning signs present, including falsified or misleading documents, and the repeated use of the same mortgage brokers, accountants and law firms across applications.
Specific banks, lenders or businesses involved in the alleged fraud have not been named, and AUSTRAC said banks were now working to crack down on fraudulent loans obtained through deceptive means.
Thomas insisted lenders needed to reflect on their practices to ensure they were not enabling the fraudulent practices that could have a significant impact on Australia’s housing market.
“Every lender should be looking closely at these findings and asking whether the same vulnerabilities exist in their own business,” he said.
“The most effective way to stop mortgage fraud is before a loan is approved. Once a loan is established and the funds have moved, recovering the money becomes significantly harder.”
The watchdog has provided the names of individuals and businesses that may have been involved in the fraud to several agencies, including ASIC and the Australian Taxation Office.
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