ransUnion’s latest quarterly analysis of global online fraud trends found that suspected fraud activity against online gambling and gaming showed a relatively flat, slightly downward trend. The data also showed that fraudsters are decreasing their schemes against businesses, but increasing COVID-19 focused scams against consumers online.
TransUnion analyzed different industries for a change in the percent of suspected fraud against them, comparing the periods of March 11-May 18 (“phase 1”) and May 19-July 25 (“phase 2”). Online gambling saw nearly no changes in terms of suspected fraud (-1%), with promotion abuse being the top type of fraud. Online gaming showed a slight decline of 3% regarding suspected fraud, with “gold farming” as the main type of fraud.
Asked by Yogonet about the reasons for these trends, Angie White, senior manager at TransUnion said: “We believe gambling fraud, and more specifically bonus abuse and gold farming has leveled off because fraudsters are moving to easier targets that are more quickly converted to cash, which corresponds to the big increases we've seen in both credit card and shipping fraud.”
“We're increasingly seeing that bad actors know no boundaries, moving across industries and geographies to exploit vulnerabilities. This is why it's so critical to share intelligence across industries to stop known fraud from moving from business to business,” White added.
Gambia and Grenada ranked as the top countries for suspected fraud for online gambling and gaming, respectively. “You likely have fraud rings operating in these countries which is driving up the overall fraud rate,” White suggested.
Moreover, TransUnion’s conclusions about fraud against businesses were based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship fraud prevention solution, IDVision with iovation. It found the percent of suspected fraudulent digital transactions against businesses worldwide decreased 9% from the beginning of the pandemic (phase 1) to when businesses began reopening (phase 2). In contrast, TransUnion’s Consumer Financial Hardship surveys found consumers targeted by digital COVID-19 schemes increased 10% from the early days of the pandemic (week of April 13) to more recently (week of July 27).
“With the rush for businesses to go digital as many were forced to go completely online almost overnight, fraudsters tried to take advantage,” said Shai Cohen, senior vice president of Global Fraud Solutions at TransUnion. “They were most likely unsuccessful in their attempts and took their scams elsewhere as those businesses ramped up their digital fraud prevention solutions while providing a friction-right consumer experience. Conversely with consumers, fraudsters are increasingly using COVID-19 to prey on those persons who are facing mounting financial pressures.”
“It appears fraudsters assume travel & leisure companies are scrutinizing transactions less in order to capture more revenue as the pandemic continues to severely negatively impact their business,” said Melissa Gaddis, senior director of customer success, Global Fraud Solutions at TransUnion. “Another interesting note is that telecommunications, e-commerce and financial services companies – all industries that have fared relatively well during the pandemic – were targeted with the most digital fraud early in the pandemic but are now among the least targeted. This shows us that fraudsters initially targeted the hottest industries with the most money to be had early in the pandemic in order to hide behind the rush of transactions but have now made an obvious shift.”
This quarter TransUnion analyzed fraud trends against companies to reflect the reopening of in-person business locations during the COVID-19 pandemic. TransUnion used March 11, 2020 – the date the World Health Organization (WHO) declared COVID-19 a global pandemic – as a base date for its analysis. It used May 18 and 19 as the mid-point dates during the pandemic in order to compare fraud trends during the first 68 days to the second 68 days of the pandemic. Suspected fraud are transactions that TransUnion’s customers either denied or reviewed due to fraudulent indicators.