Auto application fraud declined in Canada in the second quarter, even as fraud involving credit card applications moved in the opposite direction, according to Equifax Canada’s latest Market Pulse Fraud Trends and Insights.
The auto application fraud rate fell to 0.21 per cent in Q2 2026 as auto credit inquiries declined nine per cent year over year and new originations dropped 9.2 per cent.
But the type of fraud occurring in the auto market remains notable. Nearly 90 per cent of fraudulent auto applications involved first-party misrepresentation, including falsified employment information, altered financial documents and conflicting personal information.
First-party auto fraud accounted for a rate of 0.19 per cent, compared with just 0.02 per cent for third-party fraud. Ontario recorded the highest auto application fraud rate in Canada, while applicants aged 26 to 35 represented the largest share of fraudulent activity.
“The fraud picture is not moving in one direction,” said Carl Davies, Head of Fraud and Identity at Equifax Canada, in a statement. “With credit cards, identity theft is the biggest concern. In auto lending, the challenge is overwhelmingly applicants misrepresenting their own circumstances. Understanding the differences in what type of fraud is occurring is important because the methods used to detect and prevent fraud also need to be different.”
The decline in auto fraud contrasts with an eight per cent year-over-year increase in credit card application fraud, which reached 0.91 per cent in Q2. Equifax said that increase was driven primarily by third-party identity theft.
Across consumer credit products, the overall application fraud rate reached 0.66 per cent, up five per cent from a year earlier.
Although the auto application fraud rate declined, dealerships and lenders continue to face risks from falsified employment and financial information. The concentration of auto fraud in first-party misrepresentation also means verification processes remain important even as overall application volumes and fraud rates ease.
