Canada experienced a significant increase in suspected digital
fraud attempts in 2023, with more than 5% of all transactions where
the consumer was located in Canada being targeted by suspected
fraud, revealed a new data analysis from TransUnion (NYSE: TRU).
While the rate of suspected digital fraud grew YoY globally by 8%
from 2022-2023, Canadian-based fraud significantly outpaced the
global rate with a 39% increase in 2023 from 3.6% in 2022. Canada
had the fifth highest rate of suspected digital fraud and the third
highest rate increase from 2022-2023 out of the 19 countries
analyzed.
The pivot to increasingly digital transactions
since the beginning of the pandemic means Canadians face a new norm
when it comes to the elevated severity and volume of attempted
digital fraud rates. At the same time, the number of digital
transactions has markedly risen in the last few years, further
fuelling the volume of potentially fraudulent activity with a 202%
increase in suspected digital fraud attempts originating from
Canada from 2019-2023. The rate of suspected fraudulent digital
transactions also increased during this same period by 105%.
“Digital fraud attempts from Canada grew
dramatically over the past year across most industries. As the
world accelerated digital engagement, fuelled by the pandemic,
Canadian consumers and businesses face a new norm with
significantly elevated fraud risks,” said Patrick Boudreau, head of
identity management and fraud solutions at TransUnion Canada.
“Canadian businesses and consumers are challenged to remain one
step ahead of these increasingly sophisticated and ever evolving
fraudsters. Fraudsters continue to prey on organizations that have
direct access to money, products or services with easily
transferable monetary value. There is no doubt that fraud
remediation will continue to be a key priority for organization and
businesses.”
Top Industries Targeted by Suspected
Digital Fraud from Canada Include Retail, Communities, Video
gaming, Gambling and Financial Services. In 2023, the
retail sector experienced the highest rate of suspected digital
fraud, with just over 8 in every 100 transactions (8.4%) where the
consumer was located in Canada being suspected fraudulent. The rate
of suspected digital fraud in 2023 (the number of fraudulent
transactions divided by all transactions in that industry)
originating from Canada for all industries analyzed were:
- Retail: 8.4%
- Communities (online dating, forums, etc.): 6.2%
- Video gaming: 4.6%
- Gambling: 4.0%
- Financial services: 3.1%
- Telecommunications: 2.7%
- Insurance: 2.5%
- Travel and leisure: 0.6%
- Logistics: 0.4%
Significant Increase in Rate of Suspected
Digital Fraud Across Multiple Sectors. Increased suspected
digital fraud rates originating from Canada spanned every industry
except one analyzed. The telecommunications industry saw the most
significant increase with a 258% jump from 2022-2023; followed by
communities at 129%; and financial services at 75%. The only
industry without an increase was logistics, which experienced a
decline of 34%.
Suspected Digital Fraud Attempts Shift to
New Industries Globally vs. Canada
|
|
|
Industry |
Canada Rate Change from 2022-2023 |
Global Rate Change from 2022-2023 |
Telecommunications |
+258% |
+111% |
Communities (online dating, forums, etc.) |
+129% |
+17% |
Financial services |
+75% |
+3% |
Insurance |
+43% |
-8% |
Gaming |
+27% |
+41% |
Travel & Leisure |
+8% |
+8% |
Public sector |
+9% |
-1% |
Retail |
+4% |
+21% |
Gambling |
+4% |
-30% |
Logistics |
-34% |
-30% |
|
|
|
Fraud Concerns have Strong Influence over
Who Canadians Choose to do Business with and make
Purchases from. TransUnion survey data from
December 2023 shows that Canadians’ fraud risk and security
concerns have significant influence over who they choose to do
business with. This includes:
- 42% of Canadians abandon their online shopping carts due to
fraud and/or security concerns.
- 71% will not return to a website if they have fraud
concerns.
- 93% of Canadians said having confidence their personal data
will not be compromised is important when choosing who to transact
with online.
- 34% of Canadians have switched their online transactions to
another website due to fraud or security concerns.
- 46% of Canadians said that security of their personal data was
the number one consideration when deciding what online company to
do business with.
Canadians Report Being Targeted by a
Diverse Mix of Fraudulent Schemes. In the same December
2023 survey, 60% of Canadians surveyed said they were targeted with
online, email, phone call or text messaging fraud in the last three
months, of which 10% fell victim. Of those who said they were
targeted, Canadians reported a diverse mix of fraudulent schemes
including:
- Phishing (fraudulent emails, websites, social posts, QR codes,
etc., to steal data): 50%
- Smishing (fraudulent text messages intended to trick the victim
into revealing data): 43%
- Vishing (fraudulent phone calls intended to trick the victim
into revealing data): 38%
- Third-party seller scams on legitimate online retail websites:
22%
- Identity theft (personal information like name, address, phone
number or security number was stolen in a company’s data breach):
14%
- Social engineering scam (solicited to transfer or move
illegally acquired money on behalf of someone else): 18%
- Stolen credit card or fraudulent charges: 14%
- Money mule scam (solicited transfer or move illegally acquired
money on behalf of someone else): 12%
- Account takeover (online account used without permission):
11%
- Unemployment fraud: 6%
The Most Suspected Digital Fraud Occurs at
Account Creation. In reviewing the different points in a
consumer journey, the data analysis reveals that the highest
percentage of digital fraud occurs at account creation.
Globally, the analysis found that 13.9% of all
digital account creation activity involved suspected fraud in 2023.
For digital transactions where the consumer was in Canada, the
suspected fraud rate at account creation was 4.9% last year. In
comparison, the rate of suspected digital fraud at account login in
Canada was 3.9% in 2023 (2% globally). When money is being
exchanged in the transaction for instance for purchases, transfers,
deposits and withdrawals, 2.3% of those types of transactions from
Canada were suspected fraudulent (3.6% globally).
For the latest fraud trends and insights,
please click here.
About the Analysis TransUnion
came to its conclusions based on proprietary insights from billions
of transactions in its global intelligence network and a recent
global consumer survey.
The rate or percentage of suspected digital fraud
attempts reflect those which TransUnion customers either denied in
real time due to fraudulent indicators or determined were
fraudulent after reviewing — compared to all transactions it
assessed for fraud. The country and regional analyses examined
transactions where the consumer or suspected fraudster was located
in a select country and region when conducting a transaction. The
global statistic represents every country worldwide and not just
the select markets.
This online survey of 13,923 adults was conducted
December 5-23, 2023 by TransUnion with Dynata, a third-party
research provider. Adults 18 years of age and older residing in 18
countries (Brazil, Canada, Chile, Colombia, the Dominican Republic,
Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto
Rico, Rwanda, South Africa, Spain, the UK, the US and Zambia) were
surveyed using an online research panel method across a combination
of desktop, mobile and tablet devices. Survey questions were
administered in Chinese (Hong Kong), English, French (Canada),
Portuguese (Brazil) and Spanish (Colombia, the Dominican Republic,
Mexico, Puerto Rico and Spain). To ensure representativeness across
resident demographics, the survey included quotas to balance
responses across key demographics like age, gender and income.
The 2024 State of Omnichannel Fraud Report will be
available on TransUnion’s website in late March.
About TransUnion® (NYSE:
TRU) TransUnion is a global information and
insights company with over 13,000 associates operating in more than
30 countries, including Canada, where we’re the credit bureau of
choice for most of Canada’s largest banks. We make trust possible
by ensuring each person is reliably represented in the marketplace.
We do this by providing an actionable view of consumers, stewarded
with care.
Through our acquisitions and technology
investments we have developed innovative solutions that extend
beyond our strong foundation in core credit into areas such as
marketing, fraud, risk and advanced analytics. As a result,
consumers and businesses can transact with confidence and achieve
great things. We call this Information for Good® — and it leads to
economic opportunity, great experiences and personal empowerment
for millions of people around the world.
For more information visit:
www.transunion.ca
For more information or to request an
interview, contact: Contact: Alex Wilcox
E-mail: Alex.Wilcox@ketchum.com
Telephone: +1 705-878-6815
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