Gaming Sector Was the Most Targeted Industry for Digital Fraud in the UK
New data published by global information and insights provider, TransUnion, shows that Digital Fraud in the UK in the gaming sector – which includes online sports-betting and casinos etc. – is the highest in the UK.i TransUnion found that 7.3% of all transactions in that industry where the consumer was located in the UK were suspected Digital Fraud attempts in 2023. However, the rate of suspected Digital Fraud in gaming decreased 10% year-on-year (YoY).
The newly-released TransUnion 2024 State of Omnichannel Fraud Report, based on proprietary insights from TransUnion’s global intelligence network, found that outside of the gaming industry, travel and leisure saw the next highest rate of suspected Digital Fraud for transactions where the consumer was in the UK in 2023 at 6.0%. This represents a YoY increase of 18% for the travel and leisure industry and accompanies an overall increase in the raw number of digital transactions where the consumer was located in the UK recorded for the sector.
“While the gaming sector saw the highest rate of potentially fraudulent transactions versus other sectors, the fact that this figure is decreasing year-on-year is positive,” said Chad Reimers, general manager of fraud and ID at TransUnion in the UK. “We are working hard with providers across sectors to ensure consumer confidence, but there is still much work to be done, as fraudsters are constantly changing their tactics. Through our User Group forums – and working with providers to regularly optimise their fraud prevention strategies – we can help protect the digital economy and ensure trust between providers and their consumers across their respective life-cycles.”
Globally, retail surpassed gaming as the industry seeing the highest rate of suspected Digital Fraud in 2023 at 8.7%, up 21% YoY. In addition, the global telecommunications industry saw a 111% YoY increase in the suspected Digital Fraud rate globally, up to 4.5%.
Gaming sector saw the highest suspected Digital Fraud rate in 2023 in the UK, while retail recorded the highest rate globally
Industry |
UK suspected digital fraud attempt rate 2023 | UK suspected digital fraud attempt rate % change YoY | Global suspected digital fraud attempt rate 2023 | Global suspected digital fraud attempt rate % change YoY |
Gaming (online sports betting, poker, etc.) | 7.3% | -10% | 5.3% | -30% |
Travel & leisure | 6.0% | 18% | 2.3% | 8% |
Communities (online dating, forums, etc.) | 3.7% | 1% | 4.6% | 17% |
Telecommunications | 2.2% | -5% | 4.5% | 111% |
Financial services | 1.9% | -5% | 4.3% | 3% |
Insurance | 1.5% | -6% | 1.5% | -8% |
Retail | 1.3% | 3% | 8.7% | 21% |
Source: TransUnion TruValidate™
The study found that 3.6% of all transactions where the consumer was in the UK were suspected to be Digital Fraud in 2023 – compared with 5% globally. Despite there being some sectors that were more at risk, the increase in the volume of digital transactions from 2022 to 2023 where the consumer was in the UK (+7%) outpaced the increase in the volume of suspected Digital Fraud (+2%), demonstrating the positive impact of ongoing efforts to fight fraud. Meanwhile, the volume of suspected Digital Fraud was up globally by 14% from 2022 to 2023 and 105% from 2019 to 2023, outpacing the growth in digital transactions, which rose 6% and 90% respectively.
Newly created global digital accounts increasingly driving fraud – in UK and globally
The data also indicated a potential shift in tactics by fraudsters. For transactions where the consumer was in the UK in 2023, 5.5% of newly created accounts were suspected to be Digital Fraud, the highest percentage of Digital Fraud in the online customer journey in the region. This may represent bad actors hoping to engage earlier in the transactional process; examples of the types of transactions that take place during the account creation process include account signup, registration and loan origination. Similarly, the study showed that 13.5% of global transactions associated with online account creation were suspected to be Digital Fraud last year.
“This early phase new account Digital Fraud may represent a paradigm shift among fraudsters,” said Kelli Fielding, chief product officer at TransUnion in the UK. “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.”
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%) and travel and leisure (36.0%).
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 reflects those which 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) fraudulent upon customer investigation, or 4) a corporate policy violation upon customer investigation — compared to all transactions assessed.
Download the TransUnion 2024 State of Omnichannel Fraud Report to learn more. Specific country and regional data in the report includes the United Kingdom, Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, South Africa, Spain, the United States and Zambia.
Notes:
i The gaming sector saw the highest rate of suspected Digital Fraud of all sectors that met a minimum threshold in terms of number of transactions.
