Fraud 4: Document Deep Dive: How to Spot Fake Pay Stubs, NOAs, and Gift Letters

There’s a quiet moment most underwriters know well—when the numbers don’t quite line up, or a document just doesn’t look… right. You can’t always explain it at first. Maybe it’s a blurry logo. Maybe it’s a pay stub that’s just too perfect. But something in your gut says, “Slow down.”

Over the years, I’ve come to trust that instinct. Because in oan fraud, the devil is almost always in the documentation.

Let’s dig into some of the most commonly forged documents and the red flags that experienced underwriters watch for.

Pay Stubs: Where the Little Things Matter Most

Pay stubs are often the first stop for fraudsters—and with good reason. A well-faked pay stub can unlock hundreds of thousands in financing. But even good fakes usually leave clues.

Red flags to watch:

• Inconsistent formatting: Fonts that shift between lines, oddly spaced text, or misaligned numbers.

• No deductions or unrealistic ones: A $100,000 salary with just $200 in tax deductions? That’s a hard no.

• Missing year-to-date figures: Real pay stubs nearly always show this.

• Round-number paychecks: Life is messy. Exact numbers every time? Suspicious.

One trick I’ve seen used: pay stubs that match direct deposits on bank statements—but the stubs are fake, and the deposits are “loaned” for appearance. Cross-verifying with the employer (and not the number on the letterhead) is essential.

NOAs and Tax Docs: Easy to Fake, Harder to Fool

A clean Notice of Assessment (NOA) gives a lot of comfort—at least, until you realize how easy it is to forge one.

Fraudsters can replicate the CRA’s layout, including logos and barcodes. But there are still signs that set fakes apart.

What to look for:

• No CRA watermark or unique imprint: Real NOAs have distinct design elements.

• Mismatch between stated income and what's on the app: Always triangulate with job letters and T4s.

• Perfect consistency across years: Three years of exactly $85,000? That’s rare for self-employed or commission-based income.

Some lenders now request to watch CRA logins via a meeting or screen-shares to verify NOAs directly. It might feel like overkill—but it’s surprisingly effective.

Gift Letters: The Soft Spot in Many Applications

Gifted down payments can be 100% legitimate—but they’re also a known loophole for fraud.

Files where the gift letter was supposedly from a retiree gifting $100,000, yet the bank statement attached to that donor was a student chequing account with $400 in it. That’s not generosity—it’s fiction.

Key red flags:

• No proof of donor capacity: If someone is gifting six figures, there should be evidence of funds.

• Generic, unsourced letters: A single-paragraph note with no relationship listed, no date, no contact info? No thanks.

• Funds disappear post-closing: If the “gifted” money is gone the day after closing, it may have been a loan.

When in doubt, ask to speak with the donor (with consent). If the story changes or the donor seems confused, that’s your signal.

Trust but Verify

It’s easy to become numb to document review. But every forged document I’ve caught started with a second look. The small stuff matters. A spelling error on a job letter. A company name that doesn’t match its website. A deduction line that’s $0.00 when it shouldn’t be.

Fraudsters count on underwriters being too busy or too trusting. Let’s prove them wrong.