First-party fraud and consumer "fraud fatigue" are both on the rise in Canada, creating fresh challenges for insurers, brokers and other financial institutions as they try to manage identity and claims risk.
Equifax Canada's latest Market Pulse Fraud Trends and Insights report showed first-party fraud – where an individual uses their own, real identity but intentionally misrepresents information or intentions – increased from 0.25% at the end of 2024 to 0.33% by Q4 2025. While the percentages are small, the uptick represents a material rise in deliberate misrepresentation across high‑volume credit and lending flows and mirrors broader research suggesting fraud is eating into margins across financial services.
Against that backdrop, intermediaries are being urged to move beyond generic fraud warnings and build more practical, repeatable guidance into their client conversations.
Explaining why ‘small’ fraud numbers matter
Market observers said one of the first steps is helping clients understand why seemingly minor changes in fraud incidence matter. A shift from 0.25% to 0.33% in first-party fraud equates to a significant number of additional cases when spread across millions of applications and claims.
For insurers, that increase shows up in non‑disclosure and misrepresentation at proposal stage – from understated mileage and undeclared drivers in motor to inaccurate occupancy, business use or prior loss histories in property and personal lines, and incomplete medical or lifestyle disclosures in life and health.
Addressing fraud fatigue with simple routines
Equifax’s separate Fraud Survey, released for Fraud Prevention Month, suggests many consumers are simply exhausted by the volume of attempted scams. Nearly three in 10 respondents described the daily flow of fraud attempts as a “manageable annoyance”, more than a quarter said they had become numb to suspicious messages and delete them without review, and 16% reported feeling “anxious and tired” trying to distinguish real communications from fake.
That level of fatigue may blunt the impact of broad awareness campaigns. In response, advisers are being encouraged to focus on a small number of clear, simple routines that clients can put into practice even when they are busy or distracted.
For example, avoiding links in unsolicited texts or emails about financial matters, refusing to share passwords or one‑time codes, and contacting institutions using trusted numbers rather than responding directly to inbound requests.
The Equifax survey also found more than four in five Canadians are worried that technology such as artificial intelligence can be used to create convincing fake documents, including pay slips, identity papers and insurance claims.
For insurers, that concern provides an opportunity to explain why additional checks are now common, including direct verification of bank or payroll details, device or selfie‑ID checks, and slower approvals when something in a file appears inconsistent. Brokers can position these measures as protections for both sides rather than as unnecessary bureaucracy, emphasising that better verification up front reduces the risk of declined claims or payment disputes later.
Turning concern about identity theft into concrete actions
Identity theft and impersonation scams remain the top perceived threats, according to Equifax, with respondents also citing phishing and digital payment fraud as major concerns. At the same time, nearly four in 10 people admit to having clicked on a fraudulent link, and half know someone who has been a victim of identity theft.
Industry specialists said these findings point to a need for clearer, more concrete advice from insurers and intermediaries. Where insurers and brokers offer identity‑theft assistance services or monitoring tools, renewal meetings and new‑business discussions are seen as natural points to explain how those products work and what they actually cover.
Nearly half of those surveyed told Equifax they are worried that fraud is contributing to higher motor premiums for honest drivers, and similar dynamics apply in property, commercial and health lines. Practitioners said drawing a clear line between fraudulent claims and overall pricing can help clients understand why underwriting questions are becoming more detailed and why some risks attract tighter terms.
That same link is increasingly relevant in first‑party fraud, where application‑stage misrepresentation can alter how underwriters view entire customer segments. Explaining that stronger validation processes are designed to protect the risk pool, not simply to “catch people out”, may make those measures more acceptable to policyholders.
Embedding fraud guidance into routine interactions
With surveys indicating that Canadians struggle to keep up as scams evolve, there is a growing view that fraud education needs to be built into existing touchpoints rather than delivered as one‑off campaigns. New‑business interviews, mid‑term policy reviews and claims interactions are being identified as key moments to discuss the most relevant fraud and misrepresentation risks for a given client type.
For insurers and brokers, Equifax’s findings serve as a reminder that rising first‑party and identity‑based fraud, coupled with consumer desensitisation, is reshaping both underwriting and client communication. How firms use everyday interactions to set expectations, explain controls and encourage simple protective habits may prove as important as the analytics and monitoring tools deployed behind the scenes.
