ACCC warns banks on mortgage due diligence amid multi-billion scandal

This article appeared in the Australian Financial Review today, 7 April 2026. We're sharing so our customers are aware of some of the increased scrutiny banks will natuarlly be required to employ as a result of this outrageous fraud.

The competition regulator has warned banks to improve their due diligence on mortgage applications, adding to pressure on the sector following revelations that billions of dollars in loans were obtained from top lenders by people using fraudulent documents.

The intervention comes as banks write to Treasurer Jim Chalmers, calling for data held by the Australian Taxation Office to be made accessible via the open banking regime – also known as the consumer data right – to allow lenders to assess income levels stated on a mortgage application more accurately.

Banks across the country are conducting sweeping reviews of their mortgage books to identify potential problems, after The Australian Financial Review reported that fraudsters had applied for about $1 billion in loans using doctored documents, with the Commonwealth Bank raising the alarm.

Financial crimes watchdog AUSTRAC is assessing how widespread mortgage fraud is across the sector.

Ian Oppermann, the newest commissioner of the Australian Competition and Consumer Commission, said lenders should be using the data regime regardless of whether ATO data is included. It allows banks to tap into a potential borrower’s bank account – with their consent – to analyse income and expenses rather than rely on forms that can be manipulated.

“Banks can rely on the data. They can actually see what is in a transaction account and what a bank balance is,” he said.

“If I’m clever, I could manipulate a PDF any way I want, so the bank can’t tell whether that document is what it purports to be. [The CDR] essentially removes the possibility for me to act as the middleman and change something for my own benefit,” Oppermann said.

The Australian Banking Association and other representative groups said in the letter to Chalmers that the regime would be more effective if ATO data were made available.

“Secure, consent-based access to ATO-held income information would provide a robust central point of truth, significantly improving the integrity of lending decisions,” the letter said.

It was co-signed by the Mortgage and Finance Association of Australia, Customer Owned Banking Association, the Australian Finance Industry Association and FinTech Australia. The groups also asked the government to enable access to company registry data held by the Australian Securities and Investments Commission to “further strengthen financial institutions’ ability to identify and manage fraud risks”.

The lenders told Chalmers that income misrepresentation “is a persistent issue that is being amplified by the growing use of artificial intelligence and synthetic document generation.

“At the most serious end, crime syndicates may be using AI at scale to fraudulently obtain loans to launder and recycle overseas funds into Australian property and business assets,” the letter said.

It also warned that lenders’ reliance on customer-supplied payslips and bank statements was not only slow and costly, but increasingly vulnerable to manipulation. The consumer data right, which provides customers with access to their data held with service providers so that they can share it with third parties and better compare products, started in 2020. Loan assessments are a priority use case for the regime. However, take-up among the big four retail banks has been mixed amid criticism that it is too bureaucratic and complex.

Banks have spent more than $1.5 billion building the regime, and Westpac has used it for digital mortgages for the past three years, but Commonwealth Bank has not enabled it for loan applications.

The ATO said in a submission to the Productivity Commission last year that allowing individuals and businesses to authorise the sharing of their tax data through the regime could enhance “transparency, personal agency, and service delivery”.

However, it noted consent-based data disclosure is not permitted under the Taxation Administration Act 1953. As part of a review of the tax secrecy exceptions that began in 2024, Treasury sought feedback on an amendment that would allow taxpayers to share their data directly with third parties. The outcomes of the review have not yet been announced.