As the prevalence of digital fraud attempts on businesses and consumers continues to rise, TransUnion’s analysis found that fraudsters are re-focusing their efforts from financial services to the travel and leisure and gaming industries.
Across industries, the rate of suspected digital fraud attempts rose 16.5% globally when comparing Q2 2021 to Q2 2020. In the U.S., the percentage of digital fraud attempts increased at a similar rate (17.1%) during the same time period.
Which industries are most affected by the rise of digital fraud attempts?
Gaming and travel and leisure were the two most impacted industries globally for the suspected digital fraud attempt rate, rising 393.0% and 155.9% in the last year, respectively. In the U.S., this rate rose 261.9% for gaming and 136.6% for travel and leisure.
“It is quite common for fraudsters to shift their focus every few months from one industry to another,” said Shai Cohen, SVP of Global Fraud Solutions at TransUnion.
“Fraudsters tend to seek out industries that may be seeing an immense growth in transactions. This quarter, as countries began to open up more from their COVID-19 lockdowns and travel and other leisure activities became more mainstream, fraudsters clearly made this industry a top target. The immense growth in gaming fraud also can be attributed to the shifts in focus of fraudsters as this growing market becomes a larger target.”
An example of the sudden shift in focus of fraudsters can be seen in financial services. Global financial services online fraud attempt rates had risen 149% when comparing the first four months of 2021 and the last four months of 2020. But when comparing Q2 2021 and Q2 2020, the rate of suspected online financial services fraud attempts have still risen, but at a much lower rate of 18.8% globally and 38.3% in the US.
Many consumers still targeted by COVID-19 related digital fraud
As online fraud attempts against businesses continue to escalate, one in three consumers stated that they have been targeted by a digital fraud scheme related to COVID-19 during the second quarter of 2021. The study found that approximately 36% of global survey respondents said they were targeted by fraudsters in COVID-19 related digital schemes. 39% of U.S. respondents said they were targeted.
Phishing is the No. 1 type of COVID-19 related digital fraud impacting global consumers in Q2 2021. Among global consumers who say they were targeted with COVID-19-related digital fraud, 33% state they have been targeted by or fallen victim to such fraud.
Stolen credit card or fraudulent charges was the second most cited type of COVID-19 related online fraud among those targeted, affecting global consumers at 24%. Phishing was No. 1 in the U.S. at 35% followed by stolen credit card or fraudulent charges at 31%.
“One in three people globally have been targeted by or fallen victim to digital fraud during the pandemic, placing even more pressure on businesses to ensure their customers are confident in transacting with them,” said Melissa Gaddis, senior director of customer success, Global Fraud Solutions at TransUnion.
“As fraudsters continue to target consumers, it’s incumbent on businesses to do all that they can to ensure their customers have an appropriate level of security to trust their transaction is safe all while having a friction-right experience to avoid shopping cart abandonment.”