Six fraudsters were jailed for a total of 15 years after the National High Tech Crime Unit (NHTCU) uncovered their internet scam.
The Halifax, the Co-operative Bank and Lloyds TSB were conned out of a total of £350,000, with the latter losing £315,000. Six men were jailed for between 18 months and four years for fraud.
The gang used an online auction site in the UK to identify houses up for sale, usually after the owners' death.
They then gathered information about the former owners from another legitimate website, and used this information to pose as the former owner and make loan and credit card applications. Postal redirection orders diverted the approvals to a different address.
The scale of the fraud was only uncovered after one of the banks involved contacted the NHTCU. Investigations then revealed that several other institutions had been duped, but had kept quiet about the losses.
"We are not going to win the war against e-crime unless we share intelligence," said John Lyons, industrial liaison officer for the NHTCU.
"Our boys can recover the evidence they need from the computer hardware used. The only way to stop them is to take a sledgehammer to your hard drive, douse it in turps and get out the matches."
But Professor Neil Barrett, technical director at Information Risk Management, added: "Ask anyone in the fraud business and they'll tell you that the banks could do more.
"The banks are caught between speeding up the transaction and the cost of doing more checking up."
Loon's balloons will bring the internet to remote areas of the country
New clues into the biosphere on Earth in the lead up to the emergence of animal life
Planetary collision might shed light on the chaotic processes behind a star's early development
Success boosted by streamer Ninja and celebrity gamers