Largely driven by bad actors using fabricated or stolen identities,
the newly released TransUnion (NYSE: TRU) 2024 State of Omnichannel
Fraud Report, based on proprietary insights from TransUnion’s
global intelligence network, found that nearly one in seven newly
created accounts is suspected to be Digital Fraud. This may
represent a shift in tactics by fraudsters hoping to engage earlier
in the transactional process.
The study showed that 13.5% of transactions associated with
online account creation were suspected to be digital fraud globally
in 2023. Examples of the types of transactions that take place
during the account creation process include account signup,
registration and loan origination. Among the industries that saw
the highest percentage of digital account creation transactions
suspected to be digital fraud globally in 2023 were retail (44.7%),
travel and leisure (36.0%) and video gaming (31.5%).
Similarly, in the U.S., the highest percentage of digital fraud
in the online customer journey occurred at account creation, at
4.8%, varying widely by industry.
“This early phase new account digital fraud may represent a
paradigm shift of sorts among fraudsters,” said Steve Yin, senior
vice president and global head of fraud solutions at TransUnion.
“In lieu of using traditional tactics to gain access to and
ultimately compromise existing accounts, they are increasingly
choosing to create new accounts that they can control themselves.
These fraudsters leverage synthetic identities assembled in large
part through the use of credentials gathered as a result of one or
multiple data breaches.”
The study also examined the volume and severity of data breaches
over the course of 2023 and compared them to previous years.
TransUnion determined that the number of data breaches in the U.S.
increased by 157% from 2020 to 2023 and 15% year-over-year (YoY) in
2023 to a level never seen before. In addition, the average breach
risk severity (the ability of a breach to enable identity fraud),
as measured by TransUnion increased 11% YoY to 4.1 in 2023, the
highest ever measured. This rise may have played a key role in this
explosion in suspected fraudulent accounts and the record-high
lender exposure associated with synthetic identities in 2023.
In addition, the study found lender exposure to these suspected
synthetic identities for U.S. auto loans, bank credit cards, retail
credit cards, and unsecured personal loans had soared by 63%, from
$1.9 billion since the end of 2020 to $3.1 billion as of the end of
2023. This aligned with TransUnion’s digital fraud findings, which
determined synthetic identity fraud was the fastest-growing type of
digital fraud globally from 2022 to 2023. Lender exposure is
defined as the total credit amount synthetic identities have access
to for U.S. auto loans, bank credit cards, retail credit cards and
unsecured personal loans.
Synthetic Identity Fraud Increased
Significantly YoY Top fraud types and their growth
globally
Fraud type |
Percent of digital fraud in 2022 |
Percent of digital fraud in 2023 |
YoY rate increase |
Synthetic identity |
5.3% |
6.1% |
14.2% |
True identity theft |
6.2% |
6.9% |
11.2% |
Account takeover |
6.3% |
7.0% |
11.1% |
Credit card |
6.4% |
6.9% |
7.7% |
ACH/debit |
5.9% |
6.4% |
7.3% |
Source: TransUnion
TruValidate™
Overall, the study found that 5% of all global digital
transactions were suspected to be digital fraud in 2023, with the
volume of risky transactions up 14% YoY and 105% from 2019 to 2023.
This growth continues to outpace the growth in overall digital
transactions, which rose 90% from 2019 to 2023.
Retail and Video Gaming Among Top Industries Targeted by
Suspected Digital Fraud Globally
Globally, retail surpassed gaming (online gambling, poker, etc.)
as the industry saw the highest rate of suspected digital fraud in
2023 at 8.7%, up 21% YoY. In addition, the telecommunications
industry saw a 111% YoY increase in suspected digital fraud rate,
up to 4.5%.
“In recent years, the global retail industry has consistently
been among those with the highest suspected fraud attempt rates.
However, in 2023, we saw it climbed to the top of the list,” said
Cecilia Seiden, vice president of TransUnion’s retail business. “As
a result of credentials stolen in data breaches, often in
industries other than retail, it has become increasingly easy for
fraudsters to perpetrate attacks that leave retailers vulnerable to
account takeover.”
For transactions where the consumer or fraudster was located in
the U.S., however, gaming continues to see the highest digital
fraud rate, up to 10.9% in 2023 from 10.0% in 2022. This is
followed by retail, which sits at 6.1% for 2023, with its suspected
digital fraud rate down 7% YoY. For transactions where the consumer
was in the U.S., as is the case globally, the telecommunications
industry saw the greatest increase in the suspected digital fraud
rate, up 54% YoY. This is followed closely by communities like
online forums and dating sites where the suspected digital fraud
rate is up 52% YoY in the U.S.
Retail Saw the Highest Suspected Digital
Fraud Rate in 2023 Globally, While Gaming Continues to See the
Highest Rate in the U.S.
Industry |
Global suspected digital fraud attempt rate
2023 |
Global suspected digital fraud attempt rate % change
YoY |
U.S. suspected digital fraud attempt rate
2023 |
U.S. suspected digital fraud attempt rate % change
YoY |
Retail |
8.7% |
21% |
6.1% |
-7% |
Video gaming |
7.6% |
41% |
5.5% |
41% |
Gaming (online sports betting, poker, etc.) |
5.3% |
-30% |
10.9% |
9% |
Communities (online dating, forums, etc.) |
4.6% |
17% |
5.0% |
52% |
Telecommunications |
4.5% |
111% |
2.6% |
54% |
Financial services |
4.3% |
3% |
4.4% |
<1% |
Travel & leisure |
2.3% |
8% |
1.6% |
9% |
Insurance |
1.5% |
-8% |
0.9% |
-56% |
Public sector |
1.4% |
-18% |
0.5% |
-23% |
Logistics |
0.9% |
-30% |
1.0% |
-29% |
Source: TransUnion TruValidate
TransUnion came to its conclusions about Digital Fraud based on
intelligence from its identity and fraud product suite that helps
secure trust across channels and delivers efficient consumer
experiences – TransUnion TruValidate. The rate or percentage
of suspected digital fraud attempts reflect those that TransUnion
customers determined met one of the following conditions: 1) denial
in real time due to fraudulent indicators, 2) denial in real time
for corporate policy violations, 3) determined to be fraudulent
upon customer investigation, or 4) determined to be a corporate
policy violation upon customer investigation —compared to all
transactions it assessed for fraud. TransUnion came to its
conclusions about data breaches based on insights from TransUnion
TruEmpower™. The TruEmpower Breach Risk Score uses a 1–10 scale
where 1 represents least severe and 10 represents most severe.
Download the TransUnion 2024 State of Omnichannel Fraud Report
to learn more. Specific country and regional data in the report
include the United States, Botswana, Brazil, Canada, Chile,
Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico,
Namibia, the Philippines, Puerto Rico, Rwanda, South Africa, Spain,
the United Kingdom and Zambia.
For more information and insights about the global fraud
trends, please download the report.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with
over 13,000 associates operating in more than 30 countries. We make
trust possible by ensuring each person is reliably represented in
the marketplace. We do this with a Tru™ picture of each person: 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.
http://www.transunion.com/business
Contact |
Dave Blumberg |
|
TransUnion |
E-mail |
david.blumberg@transunion.com |
Telephone |
312-972-6646 |
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