Thunder Bay, ON – Despite a decrease in certain types of application fraud, Equifax Canada has raised a red flag about a significant surge in automotive fraud. The credit reporting agency reports a 54% year-over-year increase, primarily fueled by falsified credit applications and identity theft. Ontario has been hit particularly hard, with auto fraud rates doubling since the second quarter of 2023.
First-Party Fraud and Synthetic Identity Fraud
First-party fraud, where borrowers intentionally misrepresent their financial information, remains the most common type of automotive fraud. Carl Davies, Head of Fraud and Identity at Equifax Canada, highlighted the growing concern for lenders regarding this trend, warning that short-term gains for consumers can lead to severe long-term consequences.
Identity theft also continues to plague credit applications. Equifax data shows that nearly half of all fraud applications in Q2 2024 were flagged as identity fraud. While true identity fraud rates remained stable, synthetic identity fraud, which involves the creation of new identities using a mix of real and fake data, saw a significant jump.
Additional Trends
- Identity Fraud Targets: Older consumers with high credit scores are increasingly being targeted by identity thieves.
- Mortgage Fraud: While mortgage fraud rates have decreased overall, Alberta is experiencing an increase, often involving falsified income and employment documents.
- Deposit Fraud: A sharp rise in deposit fraud, primarily in the telecom industry, is another area of concern.
Vigilance is Key
As fraudsters evolve their tactics, businesses and consumers must remain vigilant. Utilizing ID theft protection tools, verifying identities, and staying informed about regional fraud trends are crucial steps in mitigating the growing threat of fraud in Canada.
For more information on fraud prevention, visit Equifax Canada’s website and the Canadian Anti-Fraud Centre.
