ACCC urges wider use of consumer data right as lenders seek access to tax records
Australia’s competition regulator has told banks to strengthen scrutiny of home loan applications after reports that fraudsters obtained large sums from major lenders using falsified documents.
The warning comes as financial institutions and industry groups push the federal government to expand the consumer data right (CDR) — often described as open banking — so lenders can verify income information held by the Australian Taxation Office (ATO). The proposal is aimed at reducing reliance on customer-supplied payslips and bank statements, which lenders say are increasingly easy to alter.
The Australian Competition and Consumer Commission (ACCC) has urged lenders to make fuller use of the existing CDR framework now, even though ATO income data is not yet available through it. Under the regime, a borrower can consent to a lender accessing bank account information so income and spending patterns can be assessed directly from transaction data.
The issue has intensified after Commonwealth Bank raised concerns about possible mortgage fraud, prompting lenders to undertake wider checks across their loan books. Fraudsters had reportedly applied for about $1 billion in loans using doctored documentation.
AUSTRAC, the financial crimes agency, is assessing how widespread such conduct may be across the banking system. The reviews are unfolding against concern that artificial intelligence is making forged material harder to detect, including the use of synthetic documents produced at speed.
According to ACCC commissioner Ian Oppermann, the data-sharing system could reduce the scope for manipulation where decisions are based on uploaded files. “If I’m clever, I could manipulate a PDF any way I want, so the bank can’t tell whether that document is what it purports to be,” he told The Australian Financial Review. “[The CDR] essentially removes the possibility for me to act as the middleman and change something for my own benefit.”
Banks and industry bodies have asked the Treasurer, Jim Chalmers, to allow ATO-held income information to be shared through the CDR, arguing that it would strengthen verification at the point of assessment. The signatories include the Australian Banking Association, the Mortgage and Finance Association of Australia, the Customer Owned Banking Association, the Australian Finance Industry Association and FinTech Australia.
The same group has also sought access to company registry information held by the Australian Securities and Investments Commission, contending it would help lenders confirm business details and manage fraud risks when assessing self-employed borrowers or complex income structures.
The consumer data right commenced in 2020 and is intended to give consumers a way to share their data between service providers, including in banking. Loan assessment has been identified as a key use case, but uptake among major banks has varied. Westpac has used the system for digital mortgages for about three years, while Commonwealth Bank has not enabled it for loan applications.
Lenders have invested more than $1.5 billion building systems and processes to support the CDR, but the regime has faced criticism for complexity and compliance burden. The push for ATO integration reflects a view within the sector that the system will be more useful if it can draw on verified government-held income data, rather than relying largely on bank transaction histories alone.
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