Published by linker 5
Posted on August 28, 2020
Conversely, consumers have been increasingly targeted by COVID-19 fraud
Information and insights provider TransUnion’s 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 for more than 40,000 websites and apps contained in its fraud prevention solutions. It found the percentage of suspected fraudulent digital transactions against businesses worldwide decreased 9% from the beginning of the pandemic (“phase one,” 11 March to 18 May) to when businesses began reopening (“phase two,” 19 May to 25 July).
In contrast, TransUnion’s Consumer Financial Hardship Study found that globally, consumers targeted by digital COVID-19 fraud schemes increased 10% from early in the pandemic (week of 13 April) to more recently (week of 27 July).
In the UK, TransUnion’s findings aligned with the global analysis. Suspected risky transactions as a percentage of all transactions originating from the UK against businesses decreased by 22% when comparing pre-pandemic (1 January to 10 March) to phase two, after an initial increase of 12% when comparing phase one to pre-pandemic. Yet the latest data from TransUnion’s study of UK households at the end of July shows that consumers have seen an increase in digital fraud attempts related to COVID-19, with one in four[i] people having been targeted since March.
John Cannon, managing director of fraud & ID at TransUnion in the UK said, “Over recent months, businesses have seen increased adoption and utilisation of digital channels and that can present attractive opportunities for fraudsters. It’s encouraging to see that we are proportionally stopping more suspected fraud attempts against businesses, thanks to robust controls. However, this will likely result in fraudsters moving to other targets. In particular, consumers are facing increasing fraud threats as our Financial Hardship Study confirms, with COVID-19 related digital fraud attempts in the UK increasing from 22%[ii] to 27%[iii] between March and July. To tackle this, senior business leaders should continuously review if current controls are adequate for the changing digital fraud landscape.”
Industries Targeted by Transactions Coming from the UK
TransUnion analysed how different industries had been impacted by looking for a change in the percent of suspected online fraud against them originating from the UK. It compared the periods of 1 January to 10 March (pre-COVID-19), 11 March to 18 May (phase one) and 19 May to 25 July (phase two).
Financial services saw a decrease of 60% when comparing suspected digital fraud pre-COVID-19 to phase two, whereas retail saw the biggest increase of 44% at the end of phase two, when compared to pre-pandemic. Telecoms also saw a significant increase in suspected fraud of 24% when comparing the same periods, followed by the insurance sector at 8%.
Travel and leisure initially saw a significant decline in suspected online fraud during phase one, but that changed in phase two, although overall there was still a 12% decrease when comparing phase two with pre-pandemic figures. Gambling saw a similar decrease of 10% in risky transactions when looking at the same timeframe.
John Cannon continued: “While suspected fraud attempts might be declining across the board for businesses, certain industries are still facing a significant threat. Like many criminals, fraudsters can be opportunistic, following the industries that are most in demand as the pandemic develops. Retail and telecommunications are both examples of this, as our figures demonstrate. Similarly, the decline in suspected fraud within travel and leisure coincided with the first phase of UK lockdown, but as restrictions have eased, scammers have stepped up fraudulent activity in this sector. It’s essential that businesses have the right prevention tools in place to help protect consumers, as well as educating them on how to spot the warning signs.”
The Cost to Consumers
An additional UK survey[iv] on COVID-19 scams showed that by the end of phase one, fraud related to the pandemic had cost UK consumers £3.6 billion and the ongoing study would suggest that figure will have continued to rise.
This research, which covered both online and offline fraud, found that one in 10 UK consumers (12%) had fallen victim to a scam in phase one, at an average cost of £550. The two most common methods of targeting consumers were via email and over the phone (both 29%), but a surprising number of scams were carried out in person (12%).
The nationwide survey suggested that those aged 18 to 34 and living in major cities are most likely to fall victim, accounting for two thirds (66%) of those believing a COVID-19 related scam and losing money as a result, and that men are almost twice as likely to be conned with a COVID-19 scam than women (62% male versus 37% female).
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