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Thursday, March 25, 2021

Digital fraud balloons due to COVID

The COVID-19 pandemic may have forced some to press the pause button on business as usual, but not fraudsters. A pair of reports out of TransUnion reveals a significant uptick in digital fraud perpetrated against businesses, globally, as well as a surge in pandemic-related fraud schemes targeting consumers.

TransUnion’s latest quarterly analysis of global online fraud trends found that since the pandemic was declared in March 2020, suspected fraudulent digital transaction attempts against businesses worldwide have grown by 46 percent. In the United States, the increase was a less-striking 22 percent.

Industries seeing the most notable upticks in digital fraud included:

  • Telecommunications, which saw a 57.5 percent increase, primarily credit card fraud;
  • Financial services, with a 57.5 percent increase, primarily identity theft;
  • Travel and leisure, with a 29.7 percent increase in credit card fraud; and
  • Gaming, which saw a 54.8 percent spike in digital frauds.

The conclusions are based on intelligence from more than 40,000 websites and apps that use TransUnion’s identity spoofing authentication and fraud analytics solution, TruValidate.

“Fraudsters are always looking to take advantage of significant world events," said Shai Cohen, senior vice president of global fraud solutions at TransUnion. The COVID-19 pandemic and its corresponding rapid digital acceleration brought on by stay-at-home orders is a global event unrivaled in the online age. By analyzing billions of transactions we screened for fraud indicators over the past year, it has become clear that the war against the virus has also brought about a war against digital fraud.”

Consumers hard hit, too

It’s not just businesses getting burned by crooks. Consumers also have a COVID target on their collective back.

A March 16, 2021, global survey conducted by TransUnion revealed that 36 percent of consumers had been targeted by digital fraud related to COVID-19 in the previous three months. That’s up from 29 percent when TransUnion asked the same question of consumers in April 2020. Among U.S. consumers, the percentage of victims rose to 38 percent this month, from 26 percent last April.

The most targeted consumers are those between the ages of 16 and 19 (Generation Z). Forty-two percent of Gen Z consumers, globally, reported being the targets of digital fraudsters; among Americans in this age group it was 53 percent. Millennials were the second most targeted age group (37 percent globally and 40 percent in the United States).

Melissa Gaddis, senior director of customer success at TransUnion, said the company also has documented a 21 percent increase in reported phishing attacks against consumers since November 2020. “This revelation shows just how essential acquiring personal credentials are for carrying out any type of digital fraud,” she said. “Consumers must be vigilant and businesses should assume all consumer information is available on the dark web and have alternatives to traditional password verification in place. end of article

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