Featuring David Carson, FBAA Head of Regulatory Affairs & Advocacy, and Stephen Dinte, Senior Financial Strategist, Australian Mortgage Planners Pty Ltd
Introduction by Broker
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Article from FBAA
The biggest risk for brokers often isn’t what you can see. It’s what you assume is safe.
Fraud in broking isn’t new. But the way it’s showing up today is.
What used to be easy to spot, like poor formatting, spelling mistakes, or inconsistent numbers, has become much more sophisticated. Now, documents look clean, consistent, and convincing. Technology, especially AI, is speeding up the change and making fraud harder to detect.
At the same time, brokers work in a fast-paced environment. Deals need to move quickly. Clients want fast results. Referrers expect conversions. This pressure, balancing speed and careful checks, is where fraud can quietly grow.
In this article, we hear from two different perspectives: compliance specialist David Carson and experienced broker Stephen Dinte. Their insights show that fraud is not just increasing but changing faster than many brokers can keep up.
Where Risk Often Begins
One of the most overlooked sources of exposure sits within referral and introducer networks.
The referral exemption allows individuals outside the credit industry to introduce clients to brokers without holding a licence. But the boundaries are strict — and often misunderstood. A referrer is only permitted to provide a client’s name, contact details and a brief description of their needs. They are not allowed to collect documents, negotiate terms, applications or provide advice on products.
The referral exemption sits within Regulation 25 of the National Consumer Credit Protection Regulations, however for a more practical, plain-English breakdown, ASIC’s Regulatory Guide RG203 is a helpful place to start.
When those lines are crossed, the risk doesn’t sit solely with the referrer. It extends to the broker.
David Carson explains that referral structures can unintentionally encourage poor behaviour, especially when payments are made for little effort. If a referrer does more than just introduce a client, such as trying to ‘add value,’ they might be engaging in credit activity without a licence.
For brokers, this means you must do more than just accept referrals. You need to check where they come from and how they are generated.
A referral should simply be a handoff, not a partnership in the deal.
What Brokers Are Seeing in Practice
From a broker’s perspective, the landscape has shifted significantly.
“Fraud risk in broking is nothing new,” says Stephen Dinte. “But it has definitely stepped up a notch, particularly with new technology like AI.”
The challenge isn’t just spotting fraud. It’s being able to recognise it when it looks legitimate.
Applications are now more polished. Documents match up. Financials look consistent. Often, the story makes sense across different points. This makes modern fraud much harder to spot.
Adding to this problem is a common misconception in the industry: that following lender policy is enough.
It isn’t.
Brokers are legally required under NCCP to meet responsible lending standards, no matter what a lender asks for. Relying only on lender processes can create a false sense of security when it’s what you assume is safe.
Raising the Standard of Due Diligence
Responding to this change isn’t complicated, but it does take discipline.
Brokers need to go beyond basic checks and use a more structured, consistent way to verify information. This means checking employment behaviour, comparing income, reviewing financial documents, and making sure all documents match both on their own and together. It also means being careful with information from third parties, especially lenders. Never accept documents at face value. Always take reasonable steps to check the information yourself.
What counts as “reasonable” will differ for each application. That’s why it’s important to document every step you perform.
The Mindset Shift
More than just process, the biggest change is in behaviour.
Brokers should move from just processing applications to actively questioning them.
Regulators call this having an “inquiring mind.” It means looking into inconsistencies instead of ignoring them and using your professional judgement at every step.
Sometimes, the most important decision a broker can make is not to proceed. As Stephen puts it, the ultimate test is simple: would you lend your own money to this applicant? If the answer is no, the path forward should be clearer.
The Bottom Line
Fraud in broking is becoming more sophisticated, more convincing and harder to detect. At the same time, the expectations placed on brokers continue to rise.
This creates a narrowing margin for error.
The brokers who succeed won’t be the fastest or most aggressive. They’ll be the most disciplined, those who ask more questions, check more details, and are willing to walk away if something doesn’t add up.
Because in today’s environment, the real risk isn’t missing a deal.
It’s approving the wrong one.
PS – we take every precaution to be sure we can correctly identify a borrower and the documents we collect and provide on your behalf to a lender. Love to chat about security any time.
