Equifax Canada warns of 31% rise in first-party fraud

Equifax Canada reported a 31 per cent rise in first-party fraud between Q4 2024 and Q4 2025, with the increase most visible in credit cards, banking and younger age groups.

The data suggests more applicants are using their real identities while misstating income or other financial details when applying for credit and banking products. The shift points to changing risk: third-party fraud remains a concern, but a larger share of suspected fraud now involves false, inconsistent or exaggerated information provided by the applicant.

"This concerning growth in first-party fraud activity is a trend no lender can afford to ignore," said Carl Davies, head of fraud and identity at Equifax Canada. "Traditional third-party attacks remain prevalent, but we are also seeing more cases where consumers appear to be manipulating their own information to gain access to credit or banking products."

Credit cards

The sharpest increase was in credit cards, where first-party fraud nearly doubled, rising from 0.08 per cent in Q4 2024 to 0.15 per cent in Q4 2025.

Contradictory or mismatched applicant data also became a more common signal in suspected first-party cases, climbing from 59 per cent of credit card cases in Q4 2024 to 77 per cent in Q4 2025.

Ontario recorded the highest regional exposure in the credit card segment, where fraud-related credit losses reached up to CAD $123 million. Delinquency pressure in the category also remained elevated as the number of suspect applications increased.

Banking shift

A similar pattern emerged in banking and deposits, though with a clear split between first-party and third-party activity. Third-party fraud attempts fell from 0.45 per cent in Q4 2024 to 0.32 per cent in Q4 2025, while first-party fraud rose from 0.51 per cent to 0.68 per cent.

The makeup of that fraud also changed. Cases involving falsified financial information increased from 1.5 per cent of first-party banking and deposit cases in Q4 2024 to 21 per cent in Q4 2025, while account abuse rose from 14 per cent to 24 per cent.

The figures suggest lenders may be seeing fewer attempts by outside actors to impersonate customers in this segment, but more cases of applicants submitting misleading financial information. The trend comes as household finances remain under pressure in many parts of Canada.

Regional pressure

First-party fraud rates were higher in Ontario and Alberta than elsewhere in the country. The increase was also more pronounced among younger consumers nationwide, although the data released did not provide a single national percentage for each age group.

In mortgage lending, people aged 26 to 45 accounted for most suspected fraudulent applications. In auto finance, those aged 35 and under accounted for the largest share of fraud-related credit losses in delinquent balances.

Those two lending categories moved in the opposite direction overall. Auto application fraud fell 19.4 per cent year over year, while mortgage fraud declined 12.5 per cent.

Even with those lower rates, potential losses linked to suspected fraud in delinquent mortgage and auto portfolios remained significant. No national loss total for those categories was provided in the figures released.

Wider question

The pattern raises a broader issue for lenders and credit providers as they assess how economic strain may be affecting borrowing behaviour. First-party fraud is often harder to classify than identity theft because the applicant is using genuine personal details, while the misrepresentation may involve income, employment, assets or other financial information.

That creates a challenge for banks and card issuers trying to distinguish deliberate falsification from application errors or incomplete disclosure. It can also leave institutions facing losses after an account has been opened and fallen into delinquency.

Davies said financial firms need to adapt their controls to address this shift in behaviour alongside more conventional fraud attempts.

"AI-based technology helps to detect falsified documents and identities," Davies said. "As fraud tactics evolve, Equifax offers reliable AI-powered tools that can help lenders identify both third-party attacks and signs that an applicant may be misrepresenting their financial position."