Look them up on the ASIC Professional Registers Search
The lack of a licence is the tell-tale sign that a broker isn’t who they claim to be. Before arranging a meeting to discuss finances with them, do a quick check on ASIC’s Professional Registers Search. See if they show up on the Australian financial services licensees and/or the Australian financial services authorised representatives registers. A mortgage broker who does not appear on either list may be operating illegally.
If the mortgage broker does give a licence number or an ABN, double check if the information they provided matches the results from the Professional Registers Search. From this database, you can see if the business’s registration and licence have any pending issues.
See if they’re part of any accredited associations
Membership in these associations is typically voluntary. However, organisations such as the Mortgage & Finance Association of Australia (MFAA) or the Finance Brokers Association of Australasia (FIBAA) require members to have specific certifications. Because of this, fraudsters will often claim to be a member of such organisations to appear more credible.
As a borrower, it’s always best to check those claims by going to the relevant websites to see if the ‘broker’ is a real member. FIBAA and MFAA both have ‘find a broker’ pages where you can look for members in your area, or you can message them directly to verify your broker's information.
Ask the right questions
Ask the potential mortgage broker about how they acquire home loan offers. Mortgage brokers are transparent about their process and won't hesitate to discuss their lender network. If the mortgage broker isn’t clear about their practices, it might be a sign that they’re untrustworthy or hiding shady business dealings.
You should also ask about how the mortgage broker will be compensated. A mortgage broker will never ask for a fee for services rendered directly from the borrower.
Check their reviews, ratings, and referrals
You can gauge a mortgage broker's credibility by checking their reviews on sites like CompareMortgageBrokers.com. Take time to read what people have to say about the broker and whether those listed on their page are genuine comments from previous clients.
From the reviews, you can also see if they’re the right fit for you. Even if they have the needed credentials and are a legitimate broker, their work ethic or customer service may not be up to your standards.
Another great way to ensure your mortgage broker is legit is by asking for referrals. Ask for recommendations from friends, family, or colleagues who have recently applied for finance through a broker.
If you think you’re speaking with a non-legitimate mortgage broker, it’s best to report it to the relevant authorities, such as the police or the AISC.
Disclaimer: The information provided in this article is general in nature and does not constitute financial or legal advice. Please seek professional advice tailored to your circumstances before making any financial decisions.