Equifax has launched a new machine learning product designed to combat two forms of first-party fraud: loan stacking and credit washing.
The new credit abuse risk model uses behavioral insights and Fair Credit Reporting Act (FCRA) data to detect these activities during pre-qualification, account opening, or portfolio review, allowing lenders to modify loan terms based on insights about FCRA complaints, the company said in a press release Friday (Jan. 30).
According to the release, loan stacking is a form of fraud in which individuals apply for multiple loans at once with no intention of repaying them. Credit laundering is the attempt to remove accurate but negative information from your credit report.
The credit abuse risk model identifies anomalous credit behavior, enables targeted decision-making without limiting consumer protection, provides insight across all credit tiers, and provides an FCRA-compliant score that includes reason codes for adverse actions, the release states.
The model works in conjunction with Equifax’s Synthetic Identity Risk tool to provide lenders with a complete view of identity legitimacy and repayment risk, according to the release.
“Credit Abuse Risk helps you quickly reduce the potential for fraud and its associated costs by focusing on application behavior in real time,” said Felipe Castillo, chief product officer, US Information Solutions, Equifax, in a release. “This supports a more reliable lending environment and increases access to credit for consumers.”
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Equifax launched a synthetic identity risk product on January 23, announcing that it uses artificial intelligence (AI) to detect and prevent synthetic identity fraud. Synthetic identity fraud is a rapidly growing threat in which fraudsters create fictitious identities and use them to open credit accounts or obtain loans. Synthetic Identity Risk can be used at account opening or on an ongoing basis as an account management tool.
Equifax announced in October 2025 that it is preparing to launch new fraud prevention tools, including a synthetic identity model and a first-party fraud model.
“Fraud remains one of the most significant and rapidly evolving threats facing our customers,” Equifax CEO Mark Begor said on an Oct. 21 earnings call. “We are leveraging new advanced AI capabilities and unique data assets to deliver a new generation of fraud prevention tools that can identify risks invisible to traditional methods.”
PYMNTS reported in March 2024 that first-party fraud is becoming an increasingly important first line of defense from payment networks, which are using data and AI to uncover fraudulent disputes in transactions.
