He provided the AFR Weekend with ready-to-use fake identities on credit and government identity cards purchased on the 'DarkWeb'.

Lenders are struggling to keep up with the changing technologies and the need to balance improving customer online experience with fraud prevention, according to experts.

They are still using Victorian-era 'justice of the peace' and other identification stamps for manually processed applications that can be bought by anyone on the internet for $16 with no questions asked.

There is no suggestion that companies offering the stamps would expect them to be used for unlawful purposes.

Imelda Newton, global fraud and identity leader for Equifax, said identity theft was estimated to be increasing by 80 per cent a year, the fasting growing source of fraud for financial institutions.

It is growing by more than one-third a year, with mortgage fraud up by 13 per cent after personal loan (16 per cent) and personal credit card fraud (47 per cent). Current costs are estimated to be about $2.2 billion.

Equifax monitors data provided by the nation's big four banks, international financial institutions, telecom providers and other credit providers.

"This is an evolving environment," said Ms Newton about identity theft. "Where criminals can steal identities they are going to use it for financial gain by applying for mortgages, personal loans and credit cards."


She said finance companies were monitoring and constantly adapting tactics as new criminal strategies emerge.

"Lenders have to balance the need to be response to customers' user experience and tightening security," she said about competing pressures.

NSW police are investigating the recent disappearance, possible theft, of up to 16,000 drivers' licences.

Connective, a loan aggregator that provides technology and administrative support from mortgage brokers, warns about an increase in the use of new technologies being used to deceive lenders and brokers.

The company claims there has been a "significant increase" in the number of suspicious loan application referrals to mortgage brokers from real estate agents.

A referral is when on agent refers a client to another agent in return for potential future work.

It claims that new-to-industry brokers are being targeted by agents that have clients who can only get a loan by submitting a fraudulent application.

Monique Hope-Pearson, Connective's group legal counsel, says: "We are conducting regular review, providing policies, procedures and tools to manage compliance requirements to ensure we do not become complacent. Culture and fraud continue to be a big ticket item for the regulator."

Australian Securities and Investments Commission, the nation's security regulator, says there has been a 3 per cent increase in reported mortgage misappropriation, theft and fraud.