Brian Sims

UK fraudsters “focusing on financial services and insurance industries”

THE LATEST quarterly fraud analysis conducted by global information and insights provider TransUnion has found that the rate of suspected digital fraud attempts emanating from the UK increased by 32% when comparing Q2 2021 and Q2 2022, with the financial services and insurance sectors having witnessed the biggest increases.

In the financial services sector, the rate of suspected digital fraud attempts has more than doubled in this period (it’s up by 260%) as fraudsters capitalise on the digital acceleration seen during the COVID-19 pandemic.

The insurance sector is close behind (up 257%), with the most common digital fraud type reported to TransUnion by companies in this sector being first party application fraud, wherein policy holders provide inaccurate information in a bid to secure lower rates or better terms.

Several other industries – including telecommunications, retail and logistics – have also seen an increase in online fraud attempts originating in the UK.

Shail Deep, chief product officer at TransUnion in the UK, informed Security Matters: “In recent years, we’ve seen fraudsters routinely shift focus across industries in alignment with changing consumer habits and rapid digital acceleration. In particular, industries that have witnessed major shifts towards a digital user experience are ripe targets for fraud and that’s precisely why financial services and insurance are experiencing such significant increases.”

Deep added: “Businesses across all areas must be vigilant and adopt advanced analytical tools that use global datasets to ensure robust fraud prevention and authentication processes.”

Digital fraud

Globally, the rate of suspected digital fraud attempts declined by approximately 14% year-on-year in Q2 2022. Similarly, the UK saw significant decreases during that time period, with gambling fraud attempts down 53%), travel and leisure decreasing by 38% and communities fraud (which includes online dating sites and forums) falling by 25%.

However, digital fraud continues to be a ‘constant’ in the lives of many consumers here in the UK, with current cost of living pressures encouraging some to engage in fraudulent activity. Indeed, TransUnion’s latest Consumer Pulse study found that nearly one third (ie 30%) of adults in the UK reported experiencing digital fraud attempts, while 3% have fallen victim to such fraud in the last three months.

Josh Gunnell, director of fraud and ID at TransUnion in the UK, observed: “Mirroring recent industry figures, our data affirms that phishing remains the top type of digital fraud, accounting for 36% of attempts reported by consumers in Q2. Phishing was followed by money or gift card scams (at 23%) and third party seller scams (17%). Long-established fraudulent activities continue to capture victims as well. 15% of respondents were targeted by card theft or fraudulent charges and 12% by attempted identity theft.”

Gunnell concluded: “Being able to link proprietary data, device identifiers and online behaviours and tap into a global network of reported fraud can help companies minimise the risk of fraud and confidently identify genuine consumers, while in parallel maintaining an effective, personalised and friction-right experience.”

*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 identity proofing, risk-based authentication and fraud analytics solution suite that is TransUnion TruValidate

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