First-party Fraud Detection: How Shared Fraud Data Can Help Protect Your Business
By Carl Davies, Head of Fraud & Identity, Equifax Canada
A cooling housing market, interest rate hikes, and rising inflation have put many Canadians in a tough financial spot. Early signs of financial stress are visible across consumer segments, and unfortunately, the economic landscape is ripe for us to see an uptick in fraud for all industry sectors.
Consumers in financial distress can be incentivized to commit first-party fraud, intentionally misrepresenting their identity or giving false information on applications, when the economic market is competitive and volatile. Identity fraud remains the biggest threat for credit card applications, with applications up 22.5 per cent in Q3 2022 over the same period in 2021, according to Equifax Canada. And recent Equifax Canada mortgage fraud trends reported that first-party fraud accounted for over 90 per cent of all suspected fraudulent applications in H1 2022.
Businesses are under tremendous pressure to respond to customer applications quickly — opening the door for fraudsters who are rapidly adapting and scaling fraud attacks. Here are three ways you can make faster and better decisions to mitigate fraud losses.
1. Operationalize your fraud management strategy using machine learning
Machine learning models leverage intelligent data, behaviour patterns, and signals you to make the best identity trust decision for your business with every transaction — helping you capture more fraud, reduce false positives, and spend less time on investigations. In the UK, Equifax has seen that deploying a machine learning score helped reduce an organization's false positives by 20 per cent and fraud investigations by 50 per cent within two months of deployment.
2. Upgrade to a powerful visual reporting tool
Reports are a great starting point, but in today’s quickly-evolving fraud landscape, you need a way to visualize data that helps you understand how your operations and rules strategy is trending. Clear, visual reports that drill into your data make it quicker and easier to understand trends and performance, saving you time so you can work on rapidly adapting your fraud mitigation strategies.
3. Leverage known fraud information
Fraudsters often apply to multiple institutions to maximize gains from fraudulent activity using the same information or variations of the same information. Having access to known fraud data reported by institutions in your industry can be invaluable in helping to manage your fraud risk. Conversely, not being in the loop can put organizations at risk: Fraudsters may freely attack those who aren't leveraging shared known fraud information, as these organizations have no insight into previous attacks on other businesses.
Ensure an applicant is a legitimate client with FraudIQ Manager™ from Equifax
Businesses of every stripe can be empowered to mitigate fraud if they have the data and solutions to verify and validate consumers adequately. Leveraging the power of multi-sector known fraud information composed of leading financial institutions, telco, auto and other industries plus machine learning and powerful data visualization, can help businesses respond to rapidly evolving fraud. Learn how our comprehensive fraud prevention platform, combining advanced analytics and consortium-based fraud protection, can help provide your customer with a seamless application experience and protect your business against fraudulent behaviour.
Get the power of FraudIQ Manager from Equifax working for you. Read more here or contact our team today.
This article is published by Equifax Canada Co.® 2023. 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.