The telecommunications, retail and financial services industries have been increasingly impacted by COVID-19 online fraud, according to TransUnion.
From a consumer perspective, Millennials have been most targeted by fraudsters using COVID-19 scams.
Overall, the percent of suspected fraudulent digital transactions rose 5% from March 11 to April 28 when compared to Jan. 1 to March 10, 2020. More than 100 million risky transactions from March 11 to April 28 have been identified.
“Given the billions of people globally that have been forced to stay at home, industries have been disrupted in a way not seen on this massive of a scale for generations,” said Shai Cohen, Senior VP of Global Fraud & Identity Solutions at TransUnion.
“Now that many transactions have shifted online, fraudsters have tried to take advantage and companies must adapt. Businesses that come out on top will be those leveraging fraud prevention tools that provide great detection rates and friction-right experiences for consumers.”
Examining fraud types and their impact on industries
“Our data shows that as social distancing changes shopping patterns, fraudsters have taken notice and targeted the more digital forward industries while following the money,” said Melissa Gaddis, senior director of customer success for TransUnion Global Fraud & Identity Solutions.
“For instance, although we found online gaming increased 64% as people stay home, it isn’t immediately lucrative to target those companies since financial information isn’t generally shared there.
“However, telecommunications, e-commerce and financial services all have large digital adoption, financial information and payments at the center of their online experience, and fared relatively well compared to other industries during the pandemic.”
Globally across industries, TransUnion found the countries with the highest percent of suspected fraudulent transactions were: 1) Yemen, 2) Syria and 3) Kazakhstan. In the U.S. overall, TransUnion found the cities with the highest percent of suspected fraudulent transactions were: 1) Springfield, Mass., 2) Akron, Ohio, and 3) Louisville, Ky.
Consumers targeted by COVID-19 schemes
To better understand the impacts of COVID-19 on consumers, 9,215 adults in the U.S., Canada, Colombia, Hong Kong, India, South Africa and the U.K. have been surveyed during the week of April 13.
Nearly three out of 10 respondents (29%) said they had been targeted by digital fraud related to COVID-19, with Millennials (those persons between the ages 26-40) being the most targeted at 34%.
Furthermore, consumers who said their household income is being negatively impacted by the COVID-19 pandemic are more likely to experience digital fraud with 32% reporting being targeted by online COVID-19 scams compared to 22% of people not financially impacted.
“A common assumption is that fraudsters target older generations who are perceived to be less digitally capable,” said Gaddis.
“Our data showed the opposite with younger generations, Millennials and Gen Z (those born in or after 1995), being the most targeted. Adding insult to injury, our survey found Millennials are being financially challenged the most during the pandemic.”