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Increase in digital fraud echoed by TransUnion analysis

Last week, the Ombudsman for Banking Services (OBS) reported that it is continuing to receive complaints on a daily basis from consumers who were deceived into providing their confidential banking information to fraudsters. According to OBS, the Covid-19 Pandemic has been a major global disrupter. This is now echoed by the just-released TransUnion report.

It’s latest quarterly analysis of global online fraud trends found that since the COVID-19 pandemic began, fraudsters in South Africa are increasing their digital schemes against businesses. In addition, TransUnion’s recent Global Consumer Pulse Study found that 37% of South African consumers have recently been targeted by COVID-19 related digital fraud.

The research found the percentage of suspected fraudulent digital transaction attempts against businesses that originated from South Africa increased by 43.62% between 11 March 2019 and 10 March 2020, and 11 March 2020 and 10 March 2021. The 11th of March 2020 is the date on which the World Health Organization declared COVID-19 a global pandemic.

“Fraudsters are always looking to take advantage of significant world events. The COVID-19 pandemic and its corresponding rapid digital acceleration brought about by lockdowns is a global event unrivalled in the online age,” said Keith Wardell, product director at TransUnion Africa. “By analysing 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.”

In South Africa across industries, TransUnion found the cities with the highest percent of suspected fraudulent digital transactions against businesses coming from them were Durban, Johannesburg and Pretoria, in that order.

Fraud Types and its Impact on Industries

TransUnion analysed a range of industries for a change in the percentage of suspected digital fraud attempts against them, comparing the 2019/2020 period to 2020/2021.

Industry Suspected fraud change coming from South Africa Global suspected fraud change for industry Top type of fraud globally
Gambling 239.87% 54.81% Policy/License Agreement Violations
Financial Services 114.68% 57.49% Identity Theft
Retail 86.32% 38.71% Promotion Abuse
Telecommunications 46.26% 57.52% Credit Card Fraud
Logistics 30.63% 4.87% Shipping Fraud
Gaming -4.96% 48.40% Gold Farming
Communities (online dating, forums, etc.) -15.71% -11.10% Profile Misrepresentation
Travel & Leisure -35.09% 29.68% Credit Card Fraud

“The pandemic has shifted South African and global consumer habits to shop and entertain online more than ever before, which has also attracted digital fraudsters who have are increasingly targeting related industries,” according to Wardell.

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