4 Ways Monitoring Activity Can Help Reduce Future Fraud Losses

With an uncertain period ahead, closely monitoring customer activity can help reduce future fraud losses in your business. Our recent Market Pulse quarterly fraud trends report showed fraud rates remain low for most products as credit demand returns to pre-pandemic levels from Q4 2019. As credit demand increases, so does the risk of potential fraud in your business.


How businesses can help reduce fraud losses


Monitor customer mortgage activity

High housing prices, a competitive housing market and interest rate hikes can all have an impact on your mortgage business. As customers get pushed out of the market, there is a risk of potential losses due to fraud for your business. 

Approximately 67% of mortgage fraud is related to false information. This includes falsified documents such as account statements, pay stubs, applications, notice of assessments and other conflicting information. Identity fraud is another concern for Canadian lenders. It accounts for 7% of all fraud applications. 


Be aware of regional fraud application variations

Monitoring customer activity to help reduce fraud and identifying regional variations across different markets in Canada can help detect potential fraud before your business incurs a loss. Keep an eye on customer behaviour in your market for signs of potential fraud including both true identity fraud and third-party fraud.


Look for signs of true identity fraud in your business

An increase in true identity fraud is a growing concern for both lenders and customers, specifically in the banking industry. The end of government stimulus packages could be one of the reasons the industry has seen a spike during the pandemic.  

True identity fraud has seen the largest increase and remains the leading type of fraud. From Q1 2021 to Q4 2021 we saw a jump in true identity fraud from 34% to 49%. Canadians exploiting and using the false bank accounts that were created during the pandemic over the last year could be driving this spike. The products that saw the biggest increase were deposit accounts with overdraft protection and personal unsecured credit cards


Be cautious with unsecured lending and credit card applications

Disposable income reducing from the highs of the peak pandemic period could lead to a spike in credit demand for unsecured lending, including credit cards. According to our recent data, credit card spending is up and credit card fraud rates are up by 49.5% this quarter when compared to Q4 2020. 

However, the rates are down by 8% from the pre-pandemic period. The top concerns for types of credit card fraud are synthetic ID fraud, conflicting information, suspicious emails and true identity fraud.

We want to help Canadians live their financial best. If you want to learn more about how understanding recent fraud trends can help minimize risk and reduce loss due to fraud, please contact your Equifax Account Representative. You can also reach us directly at 1-855-233-9226 and follow us on Twitter and LinkedIn.  


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