Marked increase in digital fraud since start of pandemic
FRAUDSTERS in South Africa have been increasing their digital schemes against businesses since the Covid-19 pandemic began, information and insights provider TransUnion’s latest quarterly analysis of global online fraud trends has found.
TransUnion’s recent Global Consumer Pulse Study also found that 37 percent of consumers had recently been targeted by Covid-19-related digital fraud.
TransUnion’s findings on fraud against businesses were based on intelligence from billions of transactions and more than 40 000 websites and apps in its identity-proofing, risk-based authentication and fraud analytics solution suite called TruValidate.
The research found the percentage of suspected fraudulent digital transaction attempts against businesses that originated from South Africa increased by 43.62 percent between March 11, 2019 and March 10 last year March, 11, 2020 was the date on which the World Health Organization declared Covid-19 a global pandemic.
TransUnion Africa product director Keith Wardell said fraudsters were always looking to take advantage of significant world events.
“The Covid-19 pandemic and its corresponding rapid digital acceleration brought about by lockdowns is a global event unrivalled in the online age,” Wardell said.
“By analysing billions of transactions we screened for fraud indicators over the past year, it has become clear that the war against the virus has also brought about a war against digital fraud,” said Wardell.
In South Africa, TransUnion found that the cities with the highest percent of suspected fraudulent digital transactions against businesses were Durban, Johannesburg and Pretoria, in that order.
Provisional findings from the Global Consumer Pulse Study, a survey of more than 10 000 consumers globally, including 910 in South Africa, from March 5 to 17 found that 37 percent of South African consumers said they had been targeted by digital fraud related to Covid-19 in the past three months. In April last year, 25 percent said they had been targeted by digital fraud related to Covid-19.
Gen Z consumers (born between 1995 and 2002) were the most targeted of any generation, at 39 percent.
Among consumers in South Africa that reported being targeted with digital Covid-19 schemes, the top pandemic-themed scheme was unemployment scams, with 29 percent saying they had been hit with them.
Wardell said the pandemic had shifted South African and global consumer habits to online shopping entertainment, which had attracted digital fraudsters who were increasingly targeting related industries.
“Despite these threats, consumers expect that businesses are able to protect their transactions but still maintain convenient digital experiences.”
Corporate Insights co-founder George Nicholls said the challenge most business leaders faced was the lack of information to reliably and continually assess their company’s vulnerability to corruption and reputational risk.
“Organisations need to quickly and proactively categorise and rank risks across the entire company, and cut the cost of fraud detection by reducing dependence upon quite often costly traditional solutions. With all these factors contributing to the rise of digital fraud, the war is most certainly not over. Automated lifestyle assessment, using the latest techniques and technologies around advanced analytics, data, information insights and machine learning, enables us to stay one step ahead of the fraudsters,” said Nicholls.
BUSINESS REPORT ONLINE