UK gaming sector “most targeted industry” for digital fraud attempts

In 2023, TransUnion found that 7.3% of all transactions in this industry where the consumer was located in the UK were suspected digital fraud attempts. That said, the rate of suspected digital fraud in gaming decreased 10% year-on-year.

The newly-released TransUnion State of Omnichannel Fraud Report 2024, which is based on proprietary insights from TransUnion’s global intelligence network, finds that outside of the gaming industry, travel and leisure witnessed the next highest rate of suspected digital fraud for transactions where the consumer was in the UK at 6.0%. This represents a year-on-year increase of circa 18% for the travel and leisure industry and accompanies an overall increase in the raw number of digital transactions where the consumer was located in the UK recorded for the sector.

“While the gaming sector witnessed the highest rate of potentially fraudulent transactions versus other sectors, the fact that this figure is decreasing year-on-year is a positive development,” said Chad Reimers, general manager of fraud and ID at TransUnion in the UK.

Reimers continued: “We are working hard with providers across sectors to ensure consumer confidence, but there’s still much work to be done as the fraudsters are constantly changing their tactics. Through our User Group Forums – and working with providers to regularly optimise their fraud prevention strategies – we can help to protect the digital economy and ensure trust between providers and their consumers.”

Global stage

Globally, and at a reported 8.7%, retail surpassed gaming as the industry witnessing the highest rate of suspected digital fraud in 2023. This figure is up 21% year-on-year.

In addition, the global telecommunications industry has been privy to a 111% year-on-year increase in the suspected digital fraud rate globally (up to 4.5%).

The volume of suspected digital fraud was up globally by 14% from 2022 to 2023 and by 105% from 2019 to 2023, outpacing the growth in digital transactions, which rose by 6% and 90% respectively.

TransUnion’s data also indicates a potential shift in tactics by the fraudsters. For those transactions where the consumer was in the UK in 2023, 5.5% of newly created accounts were suspected to be digital fraud. That’s the highest percentage of digital fraud in the online customer journey in the region. This may represent bad actors hoping to engage earlier in the transactional process.

Examples of the types of transactions that take place during the account creation procedure include account sign-up, registration and loan origination. Similarly, the study pinpoints the fact that 13.5% of global transactions in 2023 associated with online account creation were suspected to be digital fraud.

Paradigm shift

“This early phase new account digital fraud may represent a paradigm shift among fraudsters,” said Kelli Fielding, chief product officer at TransUnion in the UK. “In lieu of using traditional tactics to gain access to and ultimately compromise existing accounts, they are increasingly choosing to create new accounts that they can then control themselves. These fraudsters leverage synthetic identities, assembled in large part through the use of credentials gathered as a result of either one or multiple data breaches.”

Among those industries that witnessed the highest percentage of digital account creation transactions suspected to be digital fraud globally in 2023 were retail (44.7%) and travel and leisure (36.0%).

Specific country and regional data in the TransUnion report includes that for the UK, the US and Canada, Chile, Brazil, Colombia, Mexico, the Dominican Republic, Hong Kong, Spain, Botswana, India, Kenya, Namibia, the Philippines, Puerto Rico, Rwanda, South Africa and Zambia.