Mortgage brokers have been warned that the growing use of artificial intelligence could expose firms to new forms of fraud, with a major lender understood to have identified suspicious activity involving an AI agent.

Rob Jupp, chief executive of Brightstar Group, raised the concern at the Brightstar Specialist Lending Expo 2026, held at the London Stadium on 7 October, cautioning intermediaries against overlooking the risks associated with the technology.

Speaking in his closing address, Jupp said major lenders were increasingly concerned about the implications of AI, both for established business models and as a potential tool for fraudsters.

He suggested that fraudulent activity involving AI may already have taken place in the UK mortgage market, although he did not provide details of a confirmed case.

Jupp said: “The first piece of formal AI fraud in the UK in the mortgage market has probably already been done, and certainly the first multiple detections of an AI agent getting really close has just been frequently spoken about.”

His comments highlight the challenges facing lenders and intermediaries as AI tools become more widely used in mortgage advice, customer engagement and business processes.

Jupp also questioned whether sufficient attention was being paid to the responsibilities of regulated advisers when using AI.

He said: “AI seems all ‘upside at the moment’ but advisors shouldn’t forget who’s advice and ultimately, future is on the line, and its isn’t an AI Agent, but the regulated mortgage advisor.”

AI GENERATES GROWING SHARE OF LEADS

Despite his concerns, Jupp acknowledged the commercial opportunities emerging from the technology, revealing that AI had become a growing source of enquiries for Brightstar Group.

Six months ago, virtually none of the group’s leads originated through AI. That proportion has since risen to just under 5%.

Jupp described AI as a potential “fantastic lead generator”, although he emphasised that its effectiveness depended on the quality of the information available to it.

He urged firms to balance the opportunities for business development and efficiency against the possible consequences of relying too heavily on automated systems.

Jupp said: “If we think that there is all just upside with AI, we’re mistaken.”

He added: “Be careful and understand that it can take you to a place within your business, with your clients, that could be quite an unpleasant place, and just be mindful of that.”

The warning followed an earlier panel discussion at the Expo, during which speakers emphasised the need for human oversight of information and decisions generated by AI.