ASIC to Review Broker Oversight After $3 Billion Fraud Claims
ASIC will scrutinise how lenders use referrers and oversee brokers, following escalating mortgage fraud cases and $55 million in offset account failures.
Australia's corporate regulator has flagged a formal review of how lenders use referrers, pay remuneration and oversee mortgage brokers, in what industry bodies are describing as the most significant regulatory intervention since the Banking Royal Commission.
ASIC's 2026–27 banking sector priorities letter to bank boards stated the regulator would "commence a review into various aspects of lender conduct" in the third quarter of the financial year. MPA Australia reports the wording is notably vague: the letter does not specify which lenders will be examined, how referrers will be defined, or what "lender oversight of brokers" specifically covers. ASIC has been contacted for further detail.
The timing is anything but coincidental.
The Mortgage Fraud Backdrop
The review arrives after a year in which mortgage fraud has escalated into a serious industry-wide challenge.
Commonwealth Bank was first to act publicly, reporting itself to authorities in late February over suspected fraud. Australia's largest home lender flagged a suspected $1 billion in fraudulently obtained home loans, describing it as a challenge involving the mortgage broking and referral channels.
By March, AUSTRAC had ordered 10 banks to hand over mortgage data to gauge the scale of the problem. When Westpac, ANZ, NAB and Macquarie reportedly began working with authorities, the suspected total doubled to $2 billion. That figure later grew to $3 billion as investigations broadened.
Specific individuals have been charged. Licensed broker Thu Huong Nguyen of HTN Finance was charged over almost $13 million in alleged loan fraud. Former broker Andrew W. Hu was charged in December 2025 over close to $100 million in allegedly fraudulent loans. Solicitor Elic Tang was charged in April 2026 over more than $25 million in allegedly fraudulent property transactions. In June, NAB confirmed it had referred fraud cases to authorities and exited or suspended a number of individuals and entities.
Bank referral programs have also come under fire. CBA and Westpac still run introducer programs, under which third parties such as real estate agents and accountants receive commissions for referring clients. ANZ and NAB closed their introducer programs years ago. At the MFAA national conference in Melbourne in July, ASIC commissioner Alan Kirkland told brokers the regulator was working with AUSTRAC, police and the major banks to address the threat.
What Industry Bodies Are Saying
The Mortgage & Finance Association of Australia (MFAA) welcomed the review, saying it had been raising concerns with the regulator for some time.
"As we saw during the Banking Royal Commission, large-scale referrer programs, particularly where there is inadequate due diligence, monitoring or oversight, can create significant vulnerabilities and avenues for fraud and poor conduct," MFAA chief executive Anja Pannek said.
Pannek added that the MFAA also welcomed ASIC examining the impact of changes to banker incentives: "Incentives influence behaviour, and it is appropriate that ASIC considers whether remuneration structures are creating unintended conduct risks or contributing to poorer consumer outcomes."
The MFAA's Fraud and Referrer Working Group is developing Referrer Risk Management Standards covering due diligence, onboarding, monitoring, red flags, escalation and termination. The association is also pushing for better intelligence sharing on high-risk intermediaries across the industry.
The Finance Brokers Association of Australia (FBAA) urged a balanced approach. Chief executive Leo Gagic said: "While we strongly support efforts to identify and remove bad actors from the industry, it is equally important to recognise the vast majority of brokers operate professionally, ethically and in the best interests of their clients."
Pannek agreed that the regulatory focus should be targeted: "Additional regulation should not simply be layered onto parts of the system that are already subject to substantial oversight. The focus must be on identifying where the real risks sit and addressing them."
What This Means for Borrowers
The vast majority of mortgage brokers are licensed professionals operating under responsible lending obligations, the Best Interests Duty, and ASIC oversight. This review targets systemic risks in referral and introducer programs — not individual brokers acting professionally.
For borrowers, the practical effect may be a tightening of the bank referral and introducer landscape. A more scrutinised referral environment could reduce certain low-oversight third-party channels, which is ultimately a consumer protection measure.
Separately, ASIC has also been keeping pressure on lenders over mortgage offset account failures. Its July 2026 report reviewed eight banks representing more than 70 per cent of Australia's $2.5 trillion home loan market — including AMP Bank, ANZ, Commonwealth Bank, HSBC, ING, Macquarie and Westpac — and found those banks had paid more than $55 million in compensation for offset failures, with further remediation expected. The most common failure, accounting for 55 per cent of cases, was an offset account opened but never correctly linked to the home loan. A further 22 per cent involved accounts customers requested that were never opened.
If you hold an offset account, it is worth confirming with your lender that it is properly linked and functioning as intended. ASIC chair Sarah Court said customers "should receive the interest savings they were promised without having to find the failures themselves."
Whether you are buying your first home, comparing the cheapest home loans available, or refinancing to a better deal, working with a licensed broker who operates under the Best Interests Duty remains one of the strongest protections available to consumers. If you are considering refinancing, our refinance savings calculator can show you whether switching products makes sense for your situation.
*For full details on the review and the fraud timeline, see MPA Australia's analysis.*