‘Frighteningly easy’: How fake AI payslips fuel mortgage fraud

August 24, 2026 — 5:00am

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Bank bosses are generally among the most enthusiastic artificial intelligence evangelists in the corporate world. AI can not only cut costs, they claim, it can also improve customer service and even protect people from scammers and others who are up to no good.

Time will tell if AI lives up to all this hype. What has undoubtedly become clearer, however, is that in financial services, AI also has a more sinister side: it is extremely useful for people trying to cheat the system.

The latest example of this is AI-facilitated mortgage fraud. We learned last week there could be hundreds of millions of dollars in fraudulent loans held by Australian banks, and AI appears to have accelerated this problem.

The financial crimes watchdog, Austrac, revealed that after conducting a probe together with banks dubbed “Operation Claw”, it found there were “potentially hundreds of millions of dollars in suspected fraudulent loans”. The investigation was carried out by the Fintel Alliance, which includes the biggest banks in the country, and it drew on data from 10 major banks.

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The suspected fraud was enabled by fake payslips, fake company documents, and more. This array of fakes – which banks say can be much more easily created using AI – was then used to support home loans which were mostly linked to houses in Sydney.

In one sense, this is not a new problem for banks, which have always had to contend with fraud. But in another, Austrac’s finding underlines how AI has amplified problems such as scams, hacks and........

© The Sydney Morning Herald