Financial stress and easy‑to‑use AI tools drive a surge in first‑party loan manipulation and money mule activity, according to Equifax’s latest Fraud Index.
The 2025 year‑in‑review report estimates lenders stopped more than $1.5 billion worth of fraudulent credit applications before they were funded. But the mix of fraud is shifting towards behaviours that are harder to detect, with significant implications for credit assessment, document verification, and broader risk management.
The latest findings come as Scamwatch’s latest statistics show Australians reported more than 200,000 scams in 2025, with total losses of about $335 million – including around $172 million lost to investment scams and over $31 million to phishing – and fresh ABS data indicates about one in seven people experienced some form of personal fraud in 2024–25, with 2.3 million Australians falling victim to card fraud alone.
Equifax found first‑party fraud – where individuals manipulate their own credit applications – jumped 25.5% year‑on‑year.
Tehani Legeay, general manager of digital identity and fraud services at Equifax, said fraud is no longer limited to sophisticated syndicates.
“We’ve seen a significant spike in loan manipulations. Easy-to-use and inexpensive AI tools can now produce convincing fake documents, which may increase the temptation to falsify information to secure credit, especially amidst heightening economic pressures,” Legeay said.
The report notes that while fraudulent attempts are rising, so is prevention. Legeay highlighted that “prevention tactics during this time saved over $1.5 billion worth of fraudulent credit applications,” reflecting stronger analytics, digital identity checks, and industry data‑sharing.
Equifax also points out that transaction accounts and credit cards see a higher volume of fraud incidents, but mortgage and auto loans tend to involve much larger dollar amounts.
The report identifies a 90.9% spike in money mule activity, where account‑holders allow their bank accounts to be used to move illicit funds, sometimes willingly and sometimes under coercion.
“We’ve seen a massive 90.9% surge in money mule cases year-on-year; however, there are additional factors influencing this spike,” Legeay said, noting that improved detection means cases once coded as other fraud types are now correctly identified as money muling.
Equifax’s data shows a telling shift: reported identity takeovers fell 16.6%, while money muling spiked.
“Many accounts once thought to be subject to identity takeovers, now appear to be instances of money muling – often with the account holder's involvement, whether they are complicit or coerced,” Legeay said.
She added that the figures show both growth in criminal activity and “that as an industry, we are getting better at spotting the true origins of fraud instances,” enabling more targeted safeguards.
For the first time in three years, fraud is growing faster in credit products such as credit cards and mortgages than in non‑credit products like telco and utility applications. Credit product fraud rose 11.1% in 2025, while non‑credit fraud instances edged down 1.1%.
Equifax links the shift to stronger demand for credit: its Consumer Market Pulse data shows unsecured credit enquiries up 6%, and mortgage enquiries recording their strongest growth since 2021, at 12.3%.
Legeay concluded that “the fraud landscape is shifting. As more Australians seek credit to manage their financial needs, it creates a larger pool of opportunity for fraud,” reinforcing the need for lenders and their partners to keep evolving their fraud detection and prevention strategies.
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