NAB exits rogue players as it calls for co-ordinated economic crime strategy

National Australia Bank (NAB) has said it has been cleaning house as a sophisticated, AI-driven wave of economic crime threatens the lending industry.

The major bank issued a statement over the weekend regarding its concerns on mortgage fraud – and economic crime more broadly – after reports from The Australian Financial Review revealed that the scale of mortgage fraud in Australia may be as high as $4 billion.

The concerns are largely focused on organised crime networks allegedly harnessing artificial intelligence (AI) to fabricate loan documentation and wash illicit funds through the Australian property market.

In its reporting, the financial newspaper said that NAB and CBA had both been taking action to find and report those responsible.

In a statement on Saturday (27 June), NAB said that it had “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,” it said.

A call for a National Economic Crime Strategy

However, NAB has also said that individual bank efforts are no longer enough to counter a “heightened and increasingly sophisticated fraud environment” and is therefore calling for the urgent establishment of a National Economic Crime Strategy.

“This is complex, organised crime that spans industries and borders. These risks aren’t confined to any one institution or just banks,” the bank 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 said industry efforts alone are not enough.

NAB said that the vulnerabilities extend far beyond the major lenders.

The major bank has said that a unified national strategy is now vital to achieve a “step change” in how regulators, banks, law enforcement, and the government collaborate.

Without it, the bank said, the industry risks chasing individual bad actors, while the global syndicates pulling the strings remain untouched.

Its statement said: “NAB is 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.

“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.”

How is fraud being tracked?

The call to action comes amid a massive multi-agency investigation into mortgage fraud, which is now believed to amount to roughly $4 billion in home purchases, involving loans held by lenders including NAB and the Commonwealth Bank of Australia (CBA).

The financial intelligence regulator, AUSTRAC, is currently working alongside law enforcement and other regulators to map out the syndicate networks and has already seen several arrests being made and legal action being taken. These include the arrests of multiple bankers, brokers, lawyers, and accountants, including former NAB and CBA banker Andrew Hu. Hu was a banker turned broker (who later operated as a broker under the Hai Money credit licence) who recently faced 89 charges connected to the alleged ‘Penthouse Syndicate’ fraud scheme.

In response to the vulnerabilities, the broking industry, major banks, and aggregation groups have been conducting their own investigations where alleged fraud has been identified and established an introducer and referrer working group specifically designed to identify and plug fraud gaps within the third-party channel.

Lenders are also actively working to identify and track mortgage fraud. A key player in the fight against fraud comes through Australia’s largest Known Fraud Exchange, powered by Equifax, which includes data from 150 financial institutions.

Speaking to Broker Daily, Tehani Legeay, general manager of digital identity and fraud services at Equifax, said that the platform operates as a collaborative industry defence. However, Equifax data shows that third-party fraud listings account for less than 3 per cent of all fraud listings, with 31.6 per cent coming from first-party channel in 2025 (up from 26.2 per cent in 2024).

Given the increasing AI documentation threat, there is growing investment by aggregators and lenders alike to identify AI-generated documentation. For example, the Commonwealth Bank of Australia (CBA) recently announced the development of an AI system designed to help detect fraud.

Docuscan – an Australian AI-driven platform – also recently announced the launch of FraudX, a new AI-powered fraud detection solution designed to help brokers and lenders uncover financial fraud hidden within document metadata.

Stamping it out at the source

To combat the rise of AI-generated payslips and forged financial statements, peak industry bodies are fiercely lobbying the federal government to fast-track digital verification safeguards.

The Mortgage and Finance Association of Australia (MFAA), alongside the Australian Banking Association (ABA) and other sector groups, recently petitioned Treasurer Jim Chalmers to expand the Consumer Data Right (CDR). The industry wants direct, consent-based access to:

• Australian Taxation Office (ATO) income data (such as notices of assessment).

• Structured ASIC registry information.

This data expansion would allow brokers and lenders to verify financial data directly against official government “points of truth”, bypassing easily manipulated PDF documents provided by applicants.

The federal government has since committed $62 million over two years from 2026–27 to fund the next phase of the CDR, which includes actively exploring how to integrate secure ATO-held data into the open banking ecosystem to mitigate systemic fraud risks.

[Related: Broker and ex-banker charged over alleged multimillion-dollar fraud syndicate]

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