Canadian consumers are becoming more concerned by fraudulent activity
Fraudulent activity is a growing concern of Canadian consumers and identity fraud is one of the most concerning for financial institutions, according to new research from Equifax Canada.
Its latest poll was conducted earlier this month and found that the banking sector saw the largest share of identity fraud incidents which were the cause of 73.5% of fraudulent credit card applications and more than 89% of all deposit frauds in the fourth quarter of 2023.
More than three quarters of consumers believe that the economic challenges Canadians continue to face could make it more likely that people will commit fraud and theft.
And for the financial services industry, the research warns that fraud – and particularly identify fraud - is affecting a wider range of products.
"Identity fraud is no longer confined to traditional financial products; it has permeated into many industries including the auto industry, posing significant challenges for lenders and consumers," said Carl Davies, Head of Fraud & Identity for Equifax Canada. "The rise in identity fraud rates illustrates the urgent need for enhanced security measures and greater vigilance across all sectors."
Using strong and unique passwords, being cautious of suspicious emails or calls, carefully disposing of documents containing sensitive personal information, being careful who information is shared with, and regularly checking credit records are all recommended to help the risk of falling victim to fraud.
Fraudulent behaviour
Equifax Canada has found increases in first-party fraudulent activity in auto loan and mortgage applications.
This includes falsifying income or financial statements, which is present in 80% of auto fraud cases, while the prevalence of identity fraud when applying for auto loans has doubled since 2019.
The data also reveals a rise in mortgage application fraud rates of almost 10% in the fourth quarter of 2023 compared to a year earlier, led by Ontario, and most often involving the provision of false information.
“With consumers facing a difficult mortgage market and continued economic headwinds, we may see an increase in mortgage fraud,” cautioned Davies. “In our consumer survey, 64% of respondents agreed that people are more likely to commit fraud or theft when they’re having a hard time making ends meet, such as providing false information on a mortgage application.”
