Surge in Automotive Fraud, Identity Theft Pose Growing Threat to Businesses and Consumers
Equifax Canada’s most recent Fraud Trends report has revealed that automotive fraud in this country continues to surge at an alarming rate. According to the new data, this trend is primarily driven by falsified credit applications and the continued prevalence of identity theft, impacting both businesses and consumers.
Key Findings:
-
Automotive Fraud on the Rise: Automotive fraud has seen a staggering 54 per cent year-over-year increase, largely fueled by falsified credit applications and identity theft. Ontario, in particular, has witnessed a significant surge, with auto fraud rates doubling since Q2 2023. First-party fraud, where borrowers intentionally misrepresent their own personal information to secure credit, remains the most common type of fraud in this sector.
-
Synthetic Identity Theft Increasing: Identity theft continues to plague credit applications, accounting for 48.3 per cent of all fraud applications in Q2 2024. While true identity fraud remains a concern, synthetic identity fraud — involving the combination of real and fake data to create new identities — has seen significant growth. The incidence of synthetic identity fraud rose from 2.8 per cent in Q2 2023 to eight per cent in Q2 2024.
Other Notable Findings: High Credit Score Consumers Targeted, Deposit Fraud Rising
Older consumers with excellent credit scores are increasingly in the sights of financial criminals. Equifax Canada found that 40 per cent of third-party identity fraud cases involve individuals with credit scores above 800 (which is considered excellent), most with no prior delinquencies on their credit files.
While mortgage fraud rates have generally decreased across Canada, Alberta has experienced an upward trend, primarily involving falsified income and employment documentation.
The evolving landscape of fraud requires continued attention from both businesses and consumers. Implementing robust identity verification processes, cross-checking financial documents and credit reports, and staying informed about regional fraud trends are crucial steps to help mitigate these threats.
By leveraging advanced tools, staying informed, and fostering collaboration between businesses and consumers, we can help effectively combat the rising tide of fraud and safeguard our financial well-being.
Taking steps to guard against financial crime — whether it’s first party or third party fraud — is within your reach. Learn how to help better protect your business and your customers with Equifax Canada’s FraudIQ Manager™.
If you want to learn more about how Equifax Canada can help support your fraud prevention efforts, please contact your Equifax Account Representative. You can also reach us directly at 1-855-233-9226 and follow us on X and LinkedIn. To find more helpful resources and sign up for future webinars, please visit our Market Pulse page.
This article is published by Equifax Canada Co.® 2024. All rights reserved. No part of this article may be reproduced, copied or transmitted in any form or by any means, or stored in a retrieval system of any nature, without the prior permission of Equifax Canada Co. This article is for informational purposes only and is not intended to be legal or business advice.