Quarterly fraud analysis from global information and insights provider TransUnion found that the rate of suspected digital fraud attempts coming from the UK increased by 32% when comparing Q2 2021 and Q2 2022, with financial services and insurance having seen the biggest increases.
In financial services, the rate of suspected digital fraud attempts has more than doubled in this period (up 260%), as fraudsters capitalise on the digital acceleration seen during the pandemic. The insurance sector is close behind (up 257%), with the most common digital fraud type reported to TransUnion by companies in this sector being first party application fraud, where policy holders provide inaccurate information to get lower rates or better terms.
Several other industries also saw an increase in online fraud attempts originating in the UK, including telecommunications, retail and logistics.
“In recent years, we’ve seen fraudsters routinely shift focus across industries, aligned to changing consumer habits and rapid digital acceleration,” said Shail Deep, chief product officer at TransUnion in the UK. “In particular, industries that have seen major shifts towards a digital user experience are ripe targets and that’s why financial services and insurance are experiencing such significant increases. Businesses across all areas must be vigilant and adopt advanced analytical tools that use global datasets to ensure robust fraud prevention and authentication processes.”
Globally, the rate of suspected digital fraud attempts declined by approximately 14% year-over-year in Q2 2022. Similarly, the UK saw significant decreases during that time period including gambling (down 53%), travel and leisure (down 38%) and communities, which includes online dating sites and forums (down 25%).
However, digital fraud continues to be a constant in the lives of many consumers in the UK, with continuing cost of living pressure encouraging some to engage in fraudulent activity. TransUnion’s latest Consumer Pulse study found that nearly a third (30%) of adults in the UK reported experiencing digital fraud attempts and 3% of those fell victim in the last three months.
Josh Gunnell, director of fraud & ID at TransUnion in the UK, added: “Mirroring recent industry figures, our data affirms that phishing remains the top type of digital fraud, accounting for 36% of attempts reported by consumers in Q2. This was followed by money or gift card scams (23%) and third-party seller scams (17%). Although long-established fraudulent activities continue to capture victims as well; 15% of respondents were targeted by card theft or fraudulent charges, and 12% by attempted identity theft.
“Being able to link proprietary data, device identifiers and online behaviours and tap into a global network of reported fraud can help companies minimise the risk of fraud and confidently identify genuine consumers while maintaining an effective, personalised and friction-right experience.”