New data from Equifax released today reveals fraud and data security continue to be of concern to brokers – with over one quarter of brokers (26%) reporting they’ve been impacted by scams in the past year.
Equifax’s Mortgage Broker Pulse Survey for 2024 examines the different methods by which brokers were scammed, with the research revealing everything from basic phishing to more complex fraud schemes targeting broker-client relationships.
The research surveyed 494 brokers and 750 consumers in July 2024. Figures quoted here have either been rounded up or down to the nearest percent.
Dealing with confidential and private information and financial accounts, brokers are obvious targets for cybercriminals and bad actors.
Basic scam calls, emails and text messages were the most common form of scam encountered by brokers, followed by email scams by more sophisticated fraudsters posing as industry professionals to extract customer data or money from brokers.
To help avoid falling victim to fraudulent activity, 87% of brokers have completed fraud awareness training in the past 12 months and 63% of brokerages confirmed they include fraud awareness and training in their onboarding processes.
As a result of these practices, over 90% of brokers consider their ability to keep customer data safe as “excellent” or “good”.
To ensure data security, the majority of brokers rely on the assistance of external third-party providers, with 60% relying on their aggregator, lender, and IT service providers for fraud protection assistance.
“Ongoing awareness and training is creating higher confidence in brokers’ ability to keep customer data safe,” said Moses Samaha (pictured above), executive general manager of Equifax.
“However, most brokers still wear multiple hats and are aware of how rapidly fraud threats evolve. As a result, many brokers are seeking external support to minimise fraud and security risk by outsourcing this important task to professionals.”
The survey also revealed that 60% of consumer respondents have been impacted by fraud or scams or know someone who has, showcasing the prevalence of fraud and its impact on Australians.
This view is supported by numbers from the Australian Bureau of Statistics which show close to three million Australians had experienced some form of personal fraud.
Crucially for brokers, half of consumer respondents feel their data is only ‘somewhat safe’ with brokers and lenders, while 60% are unclear on how their data is used by brokers and lenders, which worries them.
To allay consumer fears, communication about procedures and education on data safety were nominated as the top two ways brokers and lenders can ensure their customers feel more confident that their data is safe.
“There’s a clear opportunity for brokers to work more closely with their customers to ensure they feel confident about the protection and management of their personal data,” said Samaha.
“The majority of brokers (70%) and consumers (75%) agree that everyone plays a role in keeping data safe, so active collaboration is vital if brokers are to remain trusted advisors to their customers.”
The survey also identified key trends brokers expect to shape the industry in the near future.
Half (50%) of brokers anticipate more refinancing applications in the next 12 months, with interest rates, inflationary pressures and housing prices nominated as key factors expected to impact lending assessments over the next three to five years.
These economic constraints have also shifted the factors impacting application approvals.
There has been particular growth in affordability restrictions due to inflation and static wages, with twice as many (21% in 2024 vs 11% in 2023) mortgage brokers flagging it as a cause of delay in processing loan requests.
Higher interest rates impacting applicants’ eligibility remains a key issue, with 42% of brokers identifying this as causing the most significant delays in application approvals over the past 12 months – up from 38% in 2023.
Interestingly, Samaha said the survey reveals that brokers repeatedly having to address inaccurate or incomplete information in customer applications is an emerging cause of application approval delays.
“These errors can be attributed to carelessness or lack of understanding; however, some may also be purposefully fraudulent applications, with consumers tempted to ‘fudge the numbers’ to secure a loan,” Samaha said.
“As cost-of-living pressures continue to impact Australians, brokers need to be vigilant in ensuring inaccurate applications don’t slip through the cracks.”
With banks ramping up their efforts to combat scams through a variety of cybersecurity measures, brokers, who comparatively have less resources, must also be vigilant.
Mortgage association MFAA has previously made available a suite of resources to its members to highlight awareness of cybersecurity measures.
The FBAA, which had advocated for brokers getting cyber insurance, has also has a variety of scam awareness mechanisms its broker network can access.
