Incidents of fraud via the broker channel are skyrocketing, according to Equifax Australia. The consumer credit reporting agency also revealed the top suburbs where fraud is most prevalent in the country.
Speaking at the Pepper Money Insights Roadshow in Sydney, Equifax Australia’s Steve Arsinoski shared data from the Veda shared fraud database. He noted that there’s been a 33% year-on-year (YOY) increase in fraud. Identity theft is the fastest-growing type of fraud, with an 80% YOY increase.
“Thirteen per cent of frauds reported were targeting home loans and there has been a 25 per cent year-on-year increase in frauds originating from the broker channel,” Arsinoski said. “What we have noticed is that fraud through the broker channel is increasing, and that may be because fraudsters are becoming more sophisticated in the way they are applying for certain products. With the technology they have available they can fabricate certain documentation.”
Equifax also revealed that 27% of all mortgage fraud cases involved falsifying personal details.
While the online channel is the preferred channel for fraudsters, incidents of fraud are also being perpetuated through the broker channel and through physical branches.
“Branch channel fraud is around 13 per cent, which showed signs of slowing down in 2015 but there has been a resurgence. We are finding branch fraud is continuing to increase,” Arsinoski said. “Broker fraud is sitting at 15 per cent. It is not drastically higher than branch fraud, but what is alarming is that we are seeing that 25 per cent growth from the previous year.”
The four main types of mortgage fraud are: falsifying personal details (71%), identity takeover (19%), fabricated identity (4%), and undisclosed debt/serviceability fraud (4%).
Greater Sydney and Melbourne are fraud hotspots
Over 72% of all fraud cases occur in the Greater Sydney and Melbourne areas, with Parramatta, a suburb in Sydney, now a major hotspot, according to Arsinoski.
However, the fastest-growing areas for fraud in Australia, with a 130% increase in incidents over the second half of 2016, are Newcastle and Lake Macquarie.
Illawarra, Brisbane Inner City, the Sunshine Coast, and Geelong were also included in the list of fraud hotspots.
Collections: Mortgage News