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Reduced borrowing capacity following RBA governor Michele Bullock\u2019s multiple rate hikes has driven more loan applicants to alter their documents. Picture: Martin Ollman<\/p>\n
Generative AI has opened the door to a swift increase in liar loans and homebuyers squashed by higher interest rates are committing some of the highest rates of loan fraud.<\/p>\n
Exclusive national polling has revealed nearly one in five Aussie borrowers, or about 18 per cent, have used artificial intelligence to create or alter documents for a home loan application.<\/p>\n
The national poll commissioned by comparison platform OurTop10 found that bank statements topped the list of documents being altered, accounting for 10 per cent of application forgery.<\/p>\n
This was followed by employment documents (9 per cent) and pay slips or proof of income (6 per cent). <\/p>\n
MORE: Aussie Boomers could lose $3.5tr in new wealth scam<\/a><\/p>\n Artificial intelligence has been able to produce deep fakes for years.<\/p>\n A further 3 per cent said they had used AI to create or alter a competing lender\u2019s interest rate offer. Respondents could select multiple options. <\/p>\n OurTop10 director Mansour Soltani said mortgage fraud was becoming more widespread because generative AI tools made it easier to create convincing false documents. <\/p>\n MORE: What your home will be worth in 2031: all suburbs list<\/a><\/p>\n \u201cHigher interest rates are reducing borrowing capacity, particularly for first-home buyers, and leaving some existing borrowers stuck in mortgage prison because they no longer qualify for a refinance,\u201d he said. <\/p>\n \u201cSome alter their paperwork to inflate their income or understate their expenses, seeing it as a way around those hurdles and a chance to \u2018beat the banks\u2019. <\/p>\n \u201cThe issue is that AI tools are evolving faster than lenders\u2019 ability to detect false documents. <\/p>\n \u201cAs the technology improves, fabricated paperwork could become harder to spot, even for trained staff and bank verification systems.\u201d <\/p>\n Younger Australians were more likely to report using AI to create or alter documents for a home loan application or negotiation, with 56 per cent of Gen Z and 36 per cent of Millennials claiming they had done it. <\/p>\n Bank statements or financial records were the most commonly cited documents among both groups, accounting for 33 per cent of Gen Z and 23 per cent of Millennial false documents. <\/p>\n This was followed by employment documents (19 per cent and 17 per cent, respectively) and pay slips or proof of income (19 per cent and 11 per cent). <\/p>\n \u201cYounger generations may be more comfortable using AI in their day-to-day lives. That familiarity could make some feel more confident using it to alter mortgage paperwork, without fully thinking through the consequences,\u201d Mr Soltani said. <\/p>\n \u201cBorrowers need to understand that deliberately submitting forged documents to mislead a lender can lead to criminal charges.\u201d <\/p>\n Document alteration has become more common as AI has evolved.<\/p>\n Overall, 82 per cent of Australians said they had never used AI to create or alter any loan application or inquiry documents. <\/p>\n \u201cIt highlights the case for secure data sharing between the ATO and banks, with the borrower\u2019s consent, Mr Soltani said.<\/p>\n \u201cThat would give lenders an independent government source to verify declared income and help them make more informed credit decisions.\u201d <\/p>\n The issue has attracted debate across financial institutions and regulators.<\/p>\n ASIC chair Joe Longo recently spoke to a parliamentary committee regarding traditional document-based underwriting in major banks, stating it remained a vulnerability.<\/p>\n Faking payments slips with AI is fraud.<\/p>\n Mr Longo warned that AI-assisted document fraud has become a \u201creal emerging issue for the banks,\u201d particularly as altered pay slips and statements become internally consistent and indistinguishable from genuine enterprise exports during manual reviews.<\/p>\n It\u2019s worth noting that AI, despite its increasingly realistic-looking outputs, does create certain traps where document forgers can easily get caught, leading to criminal charges.<\/p>\n AI tools frequently make slight calculation errors across complex forms that do not match running balances or fail to match itemised transactions.<\/p>\n Many commercial PDF editors and image generators also leave digital metadata footprints indicating software generation.<\/p>\n MORE: \u2018No idea\u2019: Woman loses home in Albo\u2019s rule change<\/a><\/p>\n<\/p>\n
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