The Overall Fraud Attempt Rate Decreased Nearly 25% Globally as Fraudsters Recognize More Businesses are Implementing Fraud Prevention Measures

Rhea-AI Summary

TransUnion reported a 22.6% decrease in suspected online fraud attempts year-over-year for Q1 2022. Industries like financial services, telecommunications, and retail saw declines, while gambling, insurance, and logistics experienced increases in fraud attempts, indicating a shift in fraudster focus. The U.S. experienced a 23.1% decrease overall, with financial services seeing the largest drop at 56.6%. This highlights the need for companies to enhance customer experience while combating fraud.

Positive

• Overall suspected fraud rate decreased by 22.6% YoY.
• Significant decline in fraud instances across multiple industries.
• Companies are encouraged to optimize customer experiences amidst fraud challenges.

Negative

• Financial services sector experienced a massive drop in suspected fraud attempts by 56.6%.
• Certain sectors like logistics and gambling saw increased fraud attempts, indicating vulnerabilities.

TransUnion releases quarterly fraud analysis for billions of transactions assessed in Q1 2022 and 2021

CHICAGO, April 28, 2022 (GLOBE NEWSWIRE) -- The global digital fraud rate decreased in Q1 2022 with suspected online fraud attempts declining -22.6% from the same quarter last year. TransUnion’s (NYSE:TRU) quarterly digital fraud analysis observed the suspected fraud rate year-over-year (YoY) declined in industries such as financial services, telecommunications and retail while fraudsters significantly increased their scams in sectors such as gambling, insurance and logistics.

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 identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™. The percent or rate of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions that were assessed for fraud.

“Sophisticated fraudsters pressure test which industries have ramped up fraud prevention measures and as a result, turn to new industries if efforts are being thwarted. That’s exactly what we have observed recently as fraudsters look for new opportunities or points of vulnerability,” said Shai Cohen, senior vice president of global fraud solutions at TransUnion. “It is paramount that during this dip companies focus on optimizing the customer experience for good customers.”

Suspected Digital Fraud Attempts Shift to New Industries across the Globe

Industry	Fraud Rate Change from Q1 2021 to Q1 2022
Insurance	+134.5%
Gambling	+50.1%
Logistics	+42.7%
Travel and Leisure	+13.3%
Gaming	+6.9%
Communities (online dating, forums, etc.)	-6.1%
Retail	-7.6%
Telecommunications	-20.4%
Financial Services	-63.6%

Consumers also say they are being targeted less with digital fraud, according to the recent TransUnion Consumer Pulse Survey. The survey of 10,391 adults in select countries and regions globally from Feb. 7-23, 2022 determined that 36% had been targeted by digital fraud in the last three months compared to 38% the previous quarter. Of those consumers that had been targeted, phishing scams were most common (31%) followed by money/gift card scams (28%) and third-party seller scams on legitimate online retail sites (23%).

Rate of Digital Fraud Attempts Decrease in the United States, but Some Industries See Growth

The overall rate of suspected fraud originating from the U.S. decreased -23.1% from Q1 2021 to Q1 2022 across all industries. The financial services industry saw the largest YoY decrease in the suspected digital fraud attempt rate at -56.6%. When fraud in financial services did occur, it was most likely the result of first party application fraud, which happens when an individual completes a fraudulent application(s) that contains intentionally inaccurate or manipulated information with the intention of receiving a lower rate or better terms for a policy or contract.

Certain business sectors, however, were more prone to digital fraud attempts with the logistics industry exhibiting the greatest YoY growth in Q1 2022 (45.9%) – possibly reflecting fraudsters trying to take advantage of the continued challenges within that industry as retailers struggle to ship goods in a timely manner. The logistics industry was mostly impacted by shipping fraud – which is when a buyer spoofs a shipping address or when a seller receives payment for goods or services, but never ships to the buyer. The gaming industry saw the second largest increase in the rate of suspected digital fraud in Q1 2022, growing 27.2% YoY.

“As fraud rates stabilize during a period when fraudsters are searching for new vulnerabilities, many organizations have shifted their focus to identifying more of the good customers and transactions to increase revenue and customer lifetime value. By reducing false positives, false declines, and manual review rates, organizations can dramatically improve the customer experience through trusted connections while still keeping the fraudsters at bay,” said Sean Donnelly, senior vice president and go-to-market global fraud solutions at TransUnion.

For worldwide and regional breakdowns around how much the suspected digital fraud attempt rate recently changed, what types of fraud are most prevalent in certain industries and more, download this infographic.

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 an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.

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: dblumberg@transunion.com
Telephone: 312-972-6646

FAQ

What was the fraud rate change for TransUnion in Q1 2022?

TransUnion reported a 22.6% decrease in suspected online fraud attempts year-over-year for Q1 2022.

Which industries saw an increase in fraud according to TransUnion?

The gambling, insurance, and logistics industries experienced increased fraud attempts.

How did the financial services sector perform in terms of fraud rates?

The financial services sector saw a significant 56.6% decrease in suspected fraud attempts from Q1 2021 to Q1 2022.

What factors are influencing fraud rates in different industries?

Fraudsters are shifting focus to industries with less robust fraud prevention measures.

What does TransUnion recommend companies focus on during this fraud decrease?

TransUnion advises companies to optimize the customer experience during the current dip in fraud rates.