Fraud rates across Canada increased by 33.4 per cent over the last year, with credit card, mortgage, and auto industries hit hardest

Equifax Canada has launched FraudIQ Manager™, a fraud prevention solution powered by advanced analytics and rich data sources. The cloud-based platform offers seamless integration into customer application processes and empowers businesses to mitigate risk in real time and prevent future fraud losses.

”By transitioning to the cloud, FraudIQ Manager allows Equifax to better protect our customers’ data and importantly the data of their clients, while also introducing enhanced performance and greater flexibility to adapt to changing market needs,” said Sue Hutchison, President of Equifax Canada. “We’ve reimagined and reengineered our tools and technology to deliver world-class data, analytics, and solutions. Innovation of this kind is part of our digital transformation journey to provide our clients with the unrivaled decision intelligence they need to grow their business and mitigate risk.”

The new platform leverages the power of Equifax’s FraudIQ Exchange, Canada’s largest known fraud exchange, which consists of multi-sector fraud data and has helped protect Canada’s top banks, financial institutions, telecoms, auto, and other organizations for 15 years. Over that time, Equifax has continued to evolve and adapt to changing market dynamics and client needs and now is ready to offer even greater protection to businesses in Canada via FraudIQ Manager. The platform is backed by industry-leading expertise and experience, with over 20 million Canadian client application journeys enabled for users each year. In the past four years, Equifax Canada’s fraud prevention platforms have helped organizations prevent over $5 billion in fraud loss.

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“As businesses navigate through economic challenges, it’s crucial to prioritize growth and cost savings, and of course, the goal is to prevent fraud before it happens,” said Carl Davies, Head of Fraud & Identity at Equifax Canada. “FraudIQ Manager, through its advanced technology, helps organizations efficiently capture fraud without increasing operational costs. By reducing false positives, we can help businesses convert more customers, accelerate revenue, and ultimately achieve their growth objectives.”

By combining flexibility to meet the needs of each organization, machine-learning fraud scores to help combat fraud before it happens, and the depth of Canada’s most comprehensive fraud exchange, FraudIQ Manager is uniquely positioned to help address the growing concerns of fraud in today’s economic conditions.

CREDIT CARD, MORTGAGE, AUTO AMONG SECTORS SEEING INCREASED FRAUD

Inflationary pressures are impacting consumers and businesses, which is creating new opportunities for fraudsters to take advantage. Identity theft is a growing concern in the credit card space as some consumers add more cards to their wallets to keep up with the higher cost of living. Likewise, higher interest rates are impacting mortgage affordability and may lead to more fraudulent applications. According to Equifax data, the fraud rate in credit cards increased by 78.4 per cent year-over-year in Q4 2022. Over the same period, mortgage fraud increased by 31.9 per cent, with falsified financials being the biggest concern for mortgage lenders, accounting for 56.7 per cent of fraudulent applications. The auto industry has also seen a 30.9 per cent increase in fraudulent behaviour with first-party fraud being the largest percentage of fraudulent applications.

“Fraud is a significant concern for every type of business,” said Davies. “Identity fraud continues to be the biggest threat to credit card applications and now accounts for up to 70 per cent of all credit card application fraud. Falsified financials remain the biggest concern for mortgage lenders. And, while first-party fraud is the biggest threat for auto applications, the increasing proportion of identity theft is truly concerning.”

Given the rise in fraud and current economic circumstances, Equifax recently conducted a survey to gauge consumer opinions, revealing:

• 82 per cent believe fraud will continue to increase.
• 75 per cent agreed people who wouldn’t normally commit fraud may be tempted to commit fraud due to current economic conditions.
• 21 per cent of young adults (aged 18-34) are significantly more likely to inflate their annual salary to qualify for a new credit card with a higher limit.
• 37 per cent agreed that there will be an increase in citizens committing fraud by providing false information on rental applications.
• 30 per cent agreed more fraud is likely to occur on mortgage financing applications.

EARLY SUCCESS AND HOW THE FRAUDIQ MANAGER PLATFORM WORKS

A large Canadian financial institution on the platform has seen significant success in improving their efficiency in investigating fraudulent applications using the machine-learning capabilities of FraudIQ Manager. The platform allows organizations to leverage a machine-learning fraud risk score called Precision in assessing applications to help streamline and optimize their fraud operations. The financial institution leveraging Precision experienced a 42 per cent relative reduction in false positive rate, leading to substantial efficiencies in their fraud investigation strategy.

Capturing more fraud while streamlining legitimate customer applications is critical to an organization’s profitability. With Precision, a separate large financial institution was shown they could identify 83 per cent more potential fraud cases per month. Similarly for this client, Precision could fast track more legitimate customer applications, allowing for a faster and improved customer onboarding experience.

Investigating applications to spot fraud can be time-consuming and costly. FraudIQ Manager speeds up the process with its best-in-class rules engine, offering a high degree of flexibility and customization using over 300 real-time rules to best fit an organization’s needs. The platform also boasts exceptional response times, allowing clients to integrate FraudIQ Manager directly into their customer journey in real time.

FraudIQ Manager also features a powerful data visualization tool that offers enhanced analytics through detailed dashboards and reporting, helping organizations gain valuable insights and efficiencies to drive their fraud prevention strategy.

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