The retail industry has seen a bigger rise in suspected digital fraud attempts coming from the UK than any other industry in the first half of 2023, based on the recent insights from global information and insights company, TransUnion.
New data shows that the rate of suspected digital fraud – when a consumer or a fraudster is in the UK during a transaction – in the first half of 2023 is up 16% in the retail sector in comparison to the second half of 2022. At the same time, gambling remains the industry with the largest volumes of digital fraud and an increase of 6% when compared to the second half of 2022.
“The rise in the rate of suspected digital fraud attempts in the retail sector is a worrying trend,” said Chad Reimers, general manager of fraud and ID at TransUnion in the UK. “This is likely due to a number of long-term factors, including the popularity of online shopping and the growing sophistication of fraudsters. Meanwhile, charge-back fraud – where customers dispute genuine, successfully delivered online purchases with their bank or credit card provider – remains a significant challenge, particularly in light of the growing cost of living.”
TransUnion’s recent survey shows that two fifths (40%) of UK adults said they had been targeted by online, email, phone call or text messaging fraud in the period between April and July 2023. Many of the fraud attempts reported by those consumers could potentially end up being a step towards retail fraud – whether that’s third-party seller scams, stolen credit cards or account takeovers.
Consumers who said they were targeted by fraud were most likely to experience phishing (46%), vishing (36%) or smishing (34%) attempts. These are all types of fraudulent activity where criminals try to trick people into giving them their personal information via email, phone calls or texts respectively. Vishing – or phishing via phone calls – in particular has seen a rise from 25% in the TransUnion 2023 State of Omnichannel Fraud Report relative to other tactics.
Chad Reimers continues: “With 78% of consumers globally ranking the security of their personal data as ‘very important’ when choosing who to transact with online,iv businesses need to be proactive in their approach to fraud prevention. Fraud can be a real ‘moment of truth’ for the trust between a customer and business, so the right fraud mitigation can become a key pillar of a customer proposition. This includes applying a layered approach with the latest technology and information to provide strong authentication measures and monitor for suspicious activity.
“At TransUnion, we help businesses stay ahead of the curve to protect their customers and their bottom line by offering fraud analytics and cutting-edge device and behavioural insights, as well as the latest technology advancements in document verification, to help stop fraud in real time, while limiting the friction in the user experience for genuine customers.”
TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, healthcare, insurance, retail, and travel and leisure, among others. TransUnion came to its digital fraud findings based on intelligence from its identity and fraud product suite – TruValidate.
