Equifax survey reveals heightened consciousness around credit scores amid rise in fraud rates
As the COVID-19 pandemic has cost thousands of lives in Canada and continues to choke off significant parts of the economy, its impact on household finances – which hasn’t been as uniformly negative as people might have feared – appears to have inspired a wave of consumer-credit consciousness.
According to a survey conducted by Equifax Canada, 71% of Canadians have checked their credit report within the last 12 months, including 57% who have done so in the last month. That’s in contrast to 2016, when 67% of respondents in a similar poll said they “rarely or never checked their credit reports.”
“The pandemic has clearly impacted everyone so much that more people feel the need to assess their financial situation,” said Rebecca Oakes, Equifax Canada’s AVP of Advanced Analytics.
This year’s survey also showed a greater compulsion among Canadians to check their credit scores. Over half (54%) of this year’s participants said they obtain their score at least on a yearly basis, compared to 48% a year ago. There also appeared to be a disparity across age groups, as adults aged 18 to 34 years old were reportedly more likely to check their credit cords monthly than those over the age of 35.
The trend of consumers paying more attention to their credit reports and scores comes as millions avail of payment deferral options offered by financial institutions. The company said its data shows more than 3 million consumers have taken a payment deferral since the pandemic started.
Around 14% of open mortgages (equivalent to 900,000) have reportedly had at least one month of payment deferral; about half of those have had continued deferred payments for the past four months. Consumers have also deferred payments on 2% of open credit cards (1.2 million), with deferral durations ranging from one to two months.
Equifax Canada said the data from its lending and industry partners are have become more active aide the COVID-19 crisis. The application fraud rate has reportedly risen by 43%, peaking in April. The deposit account fraud rate has escalated by 53%, reaching its highest point in May.
Concerns around fraud and identity theft appear to be playing a role in Canadian consumers’ increased focus on credit; 65% of Canadians surveyed this year said they check their credit reports to prevent such scams, compared to just 28% in 2016.
Other steps consumers are taking to protect themselves include reviewing credit card statements for fraudulent activity on receipt (83% this year, compared to 79% in 2016); avoiding the use of public Wi-Fi (59% vs. 47%); and updating their security passwords (54% vs. 43%).
“Identity thieves and fraudsters are quick to take advantage of any crisis,” Oakes said. “Spending more time online safely requires making sure you are taking steps to help protect yourself. Checking your credit report regularly remains one of the best ways to recognize and help protect against fraud and identity theft.”
Recently, Equifax Canada also released Luminate, a cloud-based fraud prevention platform that aims to help fraud managers with machine learning analytics and rich data insights. Specifically, it promises to help companies of any size by:
- Minimizing operational fraud risk by eliminating manual processes of application tracking;
- Enhancing data visualization with link analysis; and
- Gaining deeper insight into fraud activity using internal, external, and consumer-supplied data, as well as attributes and scores.
