Drawing on data from the Equifax Known Fraud Exchange and enriched by multiple sources, the Equifax Fraud Index Report reveals indicative trends from a select group of Australian organisations, signaling concerning changes in fraud patterns.

 

1. Surge in non-credit application fraud

There has been a decisive shift in the types of products targeted by fraudsters. Initially, credit products were the primary target. However, over the past four years, non-credit accounts like telco and current accounts (debit) have taken the lead, representing 57.8% of fraud listings in Q2 2024 compared to the same period the previous year. 

The volume of fraud targeting non-credit accounts increased by 22.5% in the 12 months up to the end of Q2 2024 compared to the same period last year, doubling the growth rate observed two years prior.

 

2. Persistent first-party fraud 

Other fraud types are also on the rise. First-party fraud, where individuals perpetrate the fraud themselves, experienced a 44.1% increase in volume between 2022 and 2023. While year-on-year volume growth slowed to 2.4% in Q2 2024, it remains the second most prevalent  fraud type, representing 27.8% of all fraud listings. 

First-party fraud includes scenarios such as opening credit card or loan accounts and placing charges against them with no intention of repayment. Sometimes referred to as ‘friendly fraud’, this type of fraud poses a significant threat that often goes unnoticed due to the seemingly legitimate nature of the transactions.


3. Money mules activity grows in transaction accounts

The use of money mules, predominately through transaction accounts, remains a key concern. Money muling activity grew 5.5% year-on-year to Q2 2024, following a 16.9% increase in 2022/23. While the proportion of money mule transactions remained relatively stable in 2023/24, at 8.1% of fraud compared to 8.8% in 2022/23, the sustained growth rate signals continued risk.

AUSTRAC describes a money mule as someone who transfers or moves illegally-acquired money on behalf of someone else. Criminal networks launder illicit funds through the use of money mules, which creates distance between the networks and the crime, and helps to avoid detection by law enforcement. 

Individuals facing financial hardship, social instability or are non-permanent residents may be more susceptible to money mule recruitment, enticed by the prospect of quick financial gain.


4. Significant increases in third-party fraud and dominance of identity takeover 


Third-party fraud, involving victims, constitutes a smaller proportion of overall fraud but it has surged by 58.2% in the 12 months to Q2 2024. This follows an even more substantial +79.8% increase in 2022/23. Fraudsters use stolen personal information, such as names or credit card numbers, to impersonate victims without their consent.

Identity takeover remains the most prevalent method of third-party fraud, representing 60.6% of all fraud listings in the second quarter of 2024. Its year-on-year growth rate has risen slightly from +5.9% in 2022/23 to +6.9% in 2023/24.

Our report defines identity takeover as the unauthorised use of a real person’s personally identifiable information, identity takeover allows criminals to bypass identity verification, accessing existing or opening new accounts despite AML and KYC controls. With just a single piece of personal data, fraudsters can exploit other sources to construct false profiles or replica identities.

By exploiting stolen data, perpetrators can impersonate genuine users to bypass identity verification and onboarding processes, gaining access to existing accounts or opening new ones. This results in escalating costs for businesses with each fraudulent transaction.

 

Fraud risk management

Effective fraud prevention requires a multi-layered approach, as no single solution addresses all fraud vectors. For instance, when encountering potentially falsifying information, verifying bank statements and income data against reputable sources is essential. Or when addressing conflicting application data, use technology that is up to the task of cross-referencing information across different parts of the application.

While advanced analytics and AI-driven fraud detection are important for identifying suspicious patterns, experienced fraud investigators remain vital for detecting anomalies, particularly in first-party fraud.

Integrating biometric verification, such as facial matching with liveness detection, adds an extra layer of security against identity theft by confirming the applicant is who they claim to be. Leveraging shared industry knowledge and databases of confirmed fraud events, like those facilitated by Equifax, provides early warnings of emerging trends, enabling proactive fraud detection and prevention.

The Equifax Fraud Index Report 2024 details evolving fraud trends and offers fraud protection resources for your business.
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Please reach out if you want to learn more about how Equifax fraud and identity solutions can leverage multiple data points, powerful trust signals and artificial intelligence to prevent, detect and protect your business and secure your customer interaction with less friction.