Suspected Financial Services Digital Fraud Attempts Rise Nearly 150% Worldwide As Prevalence of Digital Transactions Increase...
June 03 2021 - 8:00AM
As more consumers go online for banking and other financial
transactions, new research from TransUnion (NYSE: TRU) found that
fraudsters are ramping up their efforts in the financial services
industry. When comparing the last four months of 2020 (Sept. 1 –
Dec. 31) and the first four months of 2021 (Jan. 1 – May 1), the
company found the percentage of suspected global digital fraud
attempts1 in financial services increased 149%. In the U.S.,
financial services fraud attempts increased 109%.
Across industries, the rate of suspected digital fraud attempts
globally rose 24% when comparing the first four months of 2021 with
the last four months of 2020. In the U.S., the percentage of fraud
attempts increased at a similar rate (25%) during the same time
period.
TransUnion monitors digital fraud attempts reported by
businesses in varied industries such as gambling, gaming, financial
services, healthcare, insurance, retail and telecommunications,
among others. The conclusions are based on intelligence from
billions of transactions and more than 40,000 websites and apps
contained in its flagship identity proofing, risk-based
authentication and fraud analytics solution suite – TransUnion
TruValidate™.
“The rate of fraud attempts are up globally and especially in
the financial services industry because fraudsters understand this
is where the most high value transactions are taking place,” said
Shai Cohen, senior vice president of Global Fraud Solutions at
TransUnion. “We are seeing more financial services organizations
implement fraud prevention solutions with some success, though our
findings make it clear that this is not the time to relax. As
lenders increase their customer acquisition efforts in an
increasingly digital environment, fraud mitigation needs to be a
part of every marketing campaign. Financial institutions also need
to do even better to ensure they are providing a secure marketplace
that offers friction-right experiences to consumers.”
A secure marketplace is of special importance as COVID-19
accelerated the shift to digital financial transactions. In late
September 2020, 40% of consumers with a financial account said in a
TransUnion commissioned survey that they are using digital
platforms more frequently since the onset of the pandemic. The same
survey found 60% of consumers said that the majority of their
financial transactions are conducted via mobile applications.
Examining Fraud Types and Their Impact on
Industries
TransUnion analyzed industries with the highest increases and
declines in the percent of suspected digital fraud attempts against
them, comparing the periods of Sept. 1-Dec. 31, 2020 and Jan. 1-May
1, 2021.
1 The percent or rate of suspected or risky fraudulent digital
transaction attempts are those that TransUnion’s customers either
denied or reviewed due to fraudulent indicators compared to all
transactions it assessed for fraud
Top Suspected Digital Fraud Rate Attempt
Increases and Declines by Industry
Industry |
Suspected Fraud Percentage Change |
Top Type of Fraud |
Largest Percentage Increases |
Financial Services |
149.44% |
True Identity Theft |
Travel & Leisure |
25.03% |
Credit Card Fraud |
Gaming |
9.24% |
Gold Farming |
Largest Percentage Declines |
Logistics |
-32.74% |
Shipping Fraud |
Insurance |
-16.35% |
Suspected Ghost Broker |
Retail |
-8.33% |
Promotion Abuse |
TransUnion defines true identity theft, the top type of digital
fraud in financial services, as the consumer using a stolen
identity to commit fraud with the victim being a real person. The
second and third most reported type of digital fraud by TransUnion
financial services customers are first party application fraud and
account takeover, respectively.
First-party application fraud is when a consumer refuses to
repay legitimately incurred debts and/or falsely claims to be a
victim of identity fraud to evade debt. Account takeover is when
someone other than the owner of an account uses the account without
permission, indicating that the account has been maliciously
compromised.
“An interesting dynamic is playing out where we are seeing other
industries facing far fewer suspected fraud attempts than what has
been observed in financial services. In some cases, we are seeing a
decline in such fraud attempts,” said Melissa Gaddis, senior
director of customer success, Global Fraud Solutions at TransUnion.
“The key takeaway for businesses is that fraudsters do not treat
every industry equally. They often pick and choose an industry to
focus on based on the time of year or what businesses are seeing
more transactional activity. At times, fraud attempts are simply
conducted at random simply to determine if businesses are prepared
to meet their challenges.”
More information about TransUnion’s quarterly digital fraud
analysis can be found here.
About TransUnion (NYSE: TRU)TransUnion is a
global information and insights company that makes trust possible
in the modern economy. We do this by providing a comprehensive
picture of each person so they can be reliably and safely
represented in the marketplace. As a result, businesses and
consumers can transact with confidence and achieve great things. We
call this Information for Good.®
TransUnion Global Fraud Solutions unite both consumer and device
identities to detect threats across markets while ensuring
friction-right user experiences. The solutions, all part of the
TruValidate suite, fuse traditional data science with machine
learning to provide businesses unique insights about consumer
transactions, safeguarding tens of millions of transactions each
day.
A leading presence in more than 30 countries across five
continents, TransUnion provides solutions that help create economic
opportunity, great experiences and personal empowerment for
hundreds of millions of
people. http://www.transunion.com/business
Contact |
Dave Blumberg |
|
TransUnion |
|
|
E-mail |
david.blumberg@transunion.com |
|
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Telephone |
312-972-6646 |
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