CrimeWorld News

Digital Transactions Fraud Rose by 187% Rise in South Africa

Digital Transactions Fraud Rose by 187% Rise in South Africa

The rainbow nation is witnessing a very disturbing trend in digital transactions as the authorities search for more effective ways to contain the malaise. This is because as more consumers go online for banking and other financial transactions, new research from TransUnion, an American consumer credit reporting agency, has found that fraudsters are ramping up their efforts in the financial services industry.

When comparing the last four months of 2020 (September 1 – December 31) and the first four months of 2021 (January 1 – May 1), the company found the percentage of suspected digital fraud attempts coming from South Africa in financial services increased by 187%. This is higher than the global average which stands at 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. In South Africa, the overall percentage of fraud attempts increased by 7% during the same time period.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as financial services, healthcare, insurance, retail and telecommunications and gambling and gaming.

The 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.

“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, SVP of Global Fraud Solutions at TransUnion.

“We are seeing more financial services organisations 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.”

TransUnion believes a secure marketplace is of special importance as COVID-19 accelerated the shift to digital financial transactions. In late September 2020, 40% of consumers with a financial account said in a TransUnion commissioned survey that they are using digital platforms more frequently since the onset of the pandemic. The same survey found 60% of consumers said that the majority of their financial transactions are conducted via mobile applications.

TransUnion analysed industries with the highest increases and declines in the percentage of suspected digital fraud attempts against them coming from South Africa, comparing the periods of September 1 – December 31, 2020, and January 1 – May 1, 2021.

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

First-party application fraud is when a consumer refuses to repay legitimately incurred debts and/or falsely claims to be a victim of identity fraud to evade debt. Account takeover is when someone other than the owner of an account uses the account without permission, indicating that the account has been maliciously compromised.

“An interesting dynamic is playing out where we are seeing other industries facing far fewer suspected fraud attempts than what has been observed in financial services. In some cases, we are seeing a decline in such fraud attempts,” said Keith Wardell, product director at TransUnion Africa.

“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 simply to determine if businesses are prepared to meet their challenges.”

Comments (1)

  1. May God help us

Leave a Reply

%d bloggers like this: