Fraud in auto, credit card, mortgage sectors rise amid interest rate hikes: Equifax

A Visa logo is shown on a credit card in New Orleans on August 11, 2019. (THE CANADIAN PRESS/AP, Jenny Kane)

TORONTO — New data suggests an uptick in fraud in the auto, credit card and mortgage sectors is driven by growing financial pressures on consumers and by fraudsters using bold schemes.

An Equifax Canada report shows fraud in the automotive sector has surged 28 per cent, year-over-year, while the credit cards saw a jump of 37.9 per cent. The mortgage sector saw an 18.8 per cent increase in the fraud rate.

Carl Davies, head of fraud and identity at Equifax Canada, says if interest rates remain high, the trends in fraudulent activities could accelerate in the months ahead.

He says factors such as the supply chain woes in the auto industry have also encouraged fraudsters and thieves to be more brazen in targeting auto dealerships, alongside identity fraud in applications.

Davies says auto theft rings are more cunning than ever in using convincing fake identification and auto dealers should improve their verification processes to prevent fraud.

The report says fraudsters are using synthetic identities, which are a combination of real and fake details, making up for 68.5 per cent of all fraudulent credit card applications.

This report by The Canadian Press was first published Sept. 21, 2023.