As AI-Driven Fraud Grows More Sophisticated, Advanced Digital Defence Becomes Essential

TransUnion report finds that even as suspected digital fraud rates decline, more advanced schemes are driving greater consumer losses

New analysis from TransUnion, a global information and insights company, finds that phishing and stolen credit cards are driving the greatest financial losses for UK consumers, closely followed by the rise of third-party seller scams. These losses are occurring as the digital fraud landscape grows more complex, partly due to increasingly sophisticated AI‑driven fraud and the industrialisation of fraud operations.

According to TransUnion’s H1 2026 Update to the Top Fraud Trends Report, just over one in 10 (12%) of UK consumers said they lost money to digital fraud (email, online, phone call or text messaging scams) in the past year¹, with a median reported loss of GBP 1,205. Globally, 26% of consumers – across 18 countries and regions surveyed – said they lost money to digital fraud last year, with a median loss of GBP 1,237.

Generative AI (GenAI) has accelerated the scale and sophistication of criminal activity, allowing fraudsters to target both consumers and businesses with greater precision, speed and scale. UK consumers were most affected by fraudulent emails, websites, social posts, and QR codes meant to steal data. Over a quarter (26%) of UK consumers who said they lost money to digital fraud cited phishing as the cause – the highest‑reported category in the country and significantly higher than the global rate of 20%.

“Criminals are weaponising both consumer trust and emerging technologies,” said Chad Reimers, general manager of fraud and ID at TransUnion in the UK. “As GenAI accelerates the sophistication and scale of criminal operations, the threat landscape – and associated vectors – is evolving faster than ever for consumers and businesses. Addressing this requires a new generation of identity‑centric defences that combine advanced analytics, adaptive authentication and multilayered fraud detection. Organisations must match fraudsters’ technological innovation to stay ahead of rapidly changing schemes.”

Phishing Was the Most Prevalent Digital Fraud Type That Caused Consumer Financial Losses in United Kingdom (UK)

Percentage reporting losing money to these schemes among consumers who said they lost funds from digital fraud in the last year

Source: TransUnion consumer survey

Globally, Gen Z consumers were the most likely to report financial losses, with 39% saying they lost money to digital fraud in the past year. This elevated exposure may be influenced by Gen Z’s use of gaming platforms, cryptocurrency exchanges and social apps, which are commonly targeted by fraudsters. In the UK, Gen Z consumers showed a similar pattern with 30% saying they lost money to digital fraud in the past year, also the highest among generations surveyed.

Suspected Digital Fraud Rates Decrease in UK, but Risk Most Prevalent During Account Creation

The suspected digital fraud rate* for attempted transactions involving consumers in the UK declined from 4.9% in 2023 to 3.8% in 2025 among TransUnion’s business customers, a trend also seen globally. Nevertheless, this decrease does not necessarily indicate reduced broader criminal activity and targeting; rather, it may reflect the increased effectiveness of mature, multi-layered defences and ongoing optimisation of fraud strategies being adopted.

During account creation, 8.3% of attempted transactions globally in 2025 were suspected to be digital fraud, representing an 18% increase year-over-year (YoY) and by far the highest rate of suspected digital fraud in the consumer lifecycle. In the UK, a similar rate of 8.1% was observed.

“Fraudsters continue to view upstream vulnerabilities as a key target area,” continued Reimers. “They exploit vulnerabilities at account creation, often concealing identity manipulation until losses mount later in the life-cycle. To keep pace, businesses need intelligence‑driven, multi-layered, proactive solutions – like TransUnion Fraud Solutions – to detect sophisticated identity risks at onboarding. Notwithstanding the threat at onboarding stage, we also observe a diversification of the fraud threat, with the account management stage also being targeted, often in the pursuit of ‘bust-out’ opportunity where a fraudster will demonstrate trustworthy behaviour before vanishing without repayment.”

Industries Facing the Highest Digital Fraud Risk in the UK

TransUnion’s industry analysis shows that the Communities sector (encompassing social media marketplace, online dating, and similar businesses) faced the highest digital fraud pressure in 2025, with 12.5% of attempted transactions involving UK consumers flagged as suspected digital fraud. This was followed by Telecommunications with 5.9% of attempted transactions flagged as digital fraud and Gaming (online sports betting, poker etc.) at 3.1%.

TransUnion came to its conclusions about digital fraud based on a global survey of 12,730 consumers in 18 countries and regions from Nov. 20–Dec. 9, 2025 and intelligence from its array of TransUnion TruValidate solutions. To learn more about how TransUnion fraud prevention solutions can help businesses detect potential fraud and reduce fraud losses, click here.

Specific country and regional data in the report includes the United Kingdom, Botswana, Brazil, Canada, Chile, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Hong Kong, India, Kenya, Mexico, Namibia, Nicaragua, the Philippines, Puerto Rico, Rwanda, South Africa, Spain, the United States and Zambia. Download the TransUnion H1 2026 Update to the Top Fraud Trends Report for more information and insights about the global fraud trends.

Notes:

* Suspected digital fraud attempts reflects those which TransUnion clients 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) fraudulent upon client investigation, or 4) a corporate policy violation upon client investigation. The country and regional analyses examined transactions in which the consumer or suspected fraudster was located in a select country or region when conducting a transaction. Global statistics represent every country worldwide and not just the select countries and regions.

¹ TransUnion surveyed 1,000 consumers in the United Kingdom from Nov. 20 to Dec. 4, 2025