As Businesses Reopen Physical Locations, New TransUnion Research Shows Fraudsters Decrease Online Schemes Against Companies
August 25 2020 - 9:00AM
TransUnion’s (NYSE: TRU) latest quarterly analysis of global online
fraud trends found that fraudsters are decreasing their schemes
against businesses, but increasing COVID-19 focused scams against
consumers online.
TransUnion came to its conclusions about fraud against
businesses based on intelligence from billions of transactions and
more than 40,000 websites and apps contained in its flagship fraud
prevention solution, IDVision® with iovation®. It found the percent
of suspected fraudulent digital transactions against businesses
worldwide decreased 9% from the beginning of the pandemic (“phase
1,” March 11-May 18) to when businesses began reopening (“phase 2,”
May 19-July 25). In contrast, TransUnion’s Consumer Financial
Hardship surveys found consumers targeted by digital COVID-19
schemes increased 10% from the early days of the pandemic (week of
April 13) to more recently (week of July 27).
“With the rush for businesses to go digital as many were forced
to go completely online almost overnight, fraudsters tried to take
advantage,” said Shai Cohen, senior vice president of Global Fraud
Solutions at TransUnion. “They were most likely unsuccessful in
their attempts and took their scams elsewhere as those businesses
ramped up their digital fraud prevention solutions while providing
a friction-right consumer experience. Conversely with consumers,
fraudsters are increasingly using COVID-19 to prey on those persons
who are facing mounting financial pressures.”
In contrast to the recent suspected fraud decrease against
businesses, when comparing phase 1 (March 11-May 18) to right
before the pandemic (Jan. 1-March 10), there was a 6% rise in
suspected digital fraud against businesses. When comparing digital
transactions pre-pandemic to during the pandemic (March 11-July
25), suspected fraud against businesses remained relatively flat,
increasing 1%.
Examining Fraud Types and Their Impact on
IndustriesTransUnion analyzed the below industries for a
change in the percent of suspected fraud against them, comparing
the periods of March 11-May 18 and May 19-July 25.
Suspected Fraud Post-Pandemic
Declaration
Industry |
Suspected fraud change |
Top type of fraud |
Top country for suspected fraud origination |
Travel & Leisure |
47% |
Credit card |
Bangladesh |
Logistics |
27% |
Shipping |
Egypt |
Insurance |
8% |
Ghost broking |
Bangladesh |
Communities (online dating, forums, etc.) |
-1% |
Profile misrepresentation |
Saint Martin |
Gambling |
-1% |
Promotion abuse |
Gambia |
Gaming |
-3% |
Gold farming |
Grenada |
Retail |
-10% |
Promotion abuse |
Tajikistan |
Financial Services |
-13% |
Identity theft |
Syria |
Healthcare |
-18% |
Identity theft |
Finland |
Telecommunications |
-60% |
Credit card |
Syria |
“It appears fraudsters assume travel & leisure companies are
scrutinizing transactions less in order to capture more revenue as
the pandemic continues to severely negatively impact their
business,” said Melissa Gaddis, senior director of customer
success, Global Fraud Solutions at TransUnion. “Another
interesting note is that telecommunications, e-commerce and
financial services companies – all industries that have fared
relatively well during the pandemic – were targeted with the most
digital fraud early in the pandemic but are now among the least
targeted. This shows us that fraudsters initially targeted the
hottest industries with the most money to be had early in the
pandemic in order to hide behind the rush of transactions but have
now made an obvious shift.”
Globally across industries, TransUnion found the countries with
the highest percentage of suspected fraudulent transactions were:
1) Kazakhstan, 2) Greece and 3) Cyprus. In the U.S. overall,
TransUnion found the cities with the highest percent of suspected
fraudulent transactions were: 1) Livonia, Mich. 2) Akron, Ohio and
3) Jackson, Miss.
Consumers Targeted By COVID-19 SchemesTo better
understand the impacts of COVID-19 on consumers, TransUnion
surveyed 8,265 adults in Canada, Colombia, Hong Kong, South Africa
the U.K. and the U.S. the week of July 27. More than three out of
10 respondents (32%) said they had been targeted by digital fraud
related to COVID-19, with Gen Z (age 18-25) being the most targeted
at 36%. Among consumers reporting being targeted with digital
COVID-19 schemes globally, the top pandemic-themed scam is phishing
with 27% saying they were hit with it. Despite the survey showing
Baby Boomers were the generation least targeted with Digital
COVID-19 scams, among consumers reporting being targeted they were
the age group saying they faced the highest percentage of COVID-19
themed phishing scams.
“Phishing shows fraudsters aren’t after a quick hit, but rather
looking for the long haul,” said Gaddis. “Once a fraudster steals
consumer credentials, the wave of disruption they can cause with a
stolen or synthetic identity is endless from compromising multiple
online accounts to significantly impacting credit scores.”
Consumers can learn how to protect themselves from fraud and
identity theft with the TransUnion Fraud Victim Bill of Rights.
MethodologyThis quarter TransUnion analyzed
fraud trends against companies to reflect the reopening of
in-person business locations during the COVID-19 pandemic.
TransUnion used March 11, 2020 – the date the World Health
Organization (WHO) declared COVID-19 a global pandemic – as a base
date for its analysis. It used May 18 and 19 as the mid-point dates
during the pandemic in order to compare fraud trends during the
first 68 days to the second 68 days of the pandemic. Suspected
fraud are transactions that TransUnion’s customers either denied or
reviewed due to fraudulent indicators.
For more details about the above findings, view TransUnion’s
infographic or visit its COVID-19 resource center. TransUnion will
discuss the findings in a Sept. 15 webinar with Aite Group, Fiserv
and Ping Identity.
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 IDVision with iovation 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 |
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TransUnion |
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E-mail |
dblumberg@transunion.com |
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Telephone |
312-972-6646 |
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