Canadian Security Magazine

News Data Security
TransUnion research: Digital fraud on the rise as online banking increases


According to credit reporting agency TransUnion, as more consumers do their banking and financial transactions online, fraudsters are also ramping up their efforts.

Comparing the last four months of 2020 to the first four months of 2021, the company said it found the percentage of suspected digital fraud attempts in financial services coming from Canada increased 218%. Globally, the rate of financial services fraud attempts increased 149%.

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. The percentage of suspected digital fraud attempts coming from Canada increased 23% during the same time period.

“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, Global Fraud Solutions, TransUnion, in a company statement. “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 the economy begins to open up and perform better, businesses need to do even better to ensure they are providing a secure marketplace that offers friction-right experiences to consumers.”

Advertisement

TransUnion monitors digital fraud attempts reported by businesses in industries such as gambling, gaming, financial services, healthcare, insurance, retail and telecommunications, among others. The company states its conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its identity proofing, risk-based authentication and fraud analytics solution suite TransUnion TruValidate.

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 types of digital fraud by TransUnion financial services customers are first-party application fraud and account takeover.

“We’ve seen a remarkable increase in financial services fraud in Canada, but other industries are facing far fewer suspected fraud attempts. In some cases, we are seeing a decline in such fraud attempts,” said Anne-Marie Kelly, head of Market Development, Identity Management and Fraud Solutions, 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 to determine if businesses are prepared to meet their challenges.”

More information on TransUnion’s quarterly digital fraud report analysis is available here.