· Recovery room scams associated with cryptocurrencies were the most prevalent, accounting for 70% of all reported 2025 recovery room scams

· FCA impersonations were the highest reported to the regulator and account for over a quarter (26%) of reported scams in 2025

A Freedom of Information (FOI) request submitted to the FCA by TransUnion found that almost one in five (17%) of all scams reported in 2025 mentioned a form of recovery room scam. This percentage remains stubbornly high, underlining how many people who have already been targeted by a scam continue to be targeted again.

Recovery room scams, where criminals falsely promise to help recover money lost to a previous scam in exchange for an upfront fee, continue to cause significant harm. As many as 70% of these recovery room scams were associated with cryptocurrencies in 2025, with cryptocurrency scams themselves (14%) the third most reported scam type in that year, after FCA impersonation (26%) and recovery room scams (17%).

Madhu Kejriwal, chief executive officer of TransUnion UK and Europe said: “Unfortunately, there is a whole market of scams that target people who have already been defrauded. Once you’ve been a victim, fraudsters can seize the opportunity to target you a second time, and in a lot of cases, this can be effective because they hold verified information on the individual from the original scam.

“In the case of cryptocurrency scams, there is often no obvious route to recover lost funds, unlike traditional banking fraud, where customers can seek assistance from their bank. This naturally opens up an opportunity for criminals to pose as recovery agents.”

TransUnion's Tips for Protecting Against Fraud

1. Pause before you pay. Fraudsters rely on urgency. Any request to transfer money, share a one-time passcode, or act "immediately" to avoid a penalty should be treated as a red flag, whatever channel it comes through.

2. Verify independently. If you receive a call, email or message claiming to be from your bank, a government body or a company you deal with, contact them directly using a number or website you already trust, never one provided in the message itself. When contacting your bank you can use the 159 service, which provides direct connection to official bank contact numbers. If you have received an email which you’re not quite sure about, forward it to the Suspicious Email Reporting Service (SERS): report@phishing.gov.uk

3. Be sceptical of unexpected contact, even if it looks or sounds convincing. Always be cautious of an out of the blue contact offering to help recover money. Ask how the caller has the information. Reports of fraud can only be exchanged between law enforcement agencies and cannot be shared with private businesses that operate ‘so called’ recovery room services. Most phone providers are part of an initiative that allows customers to report suspicious text messages for free by forwarding them to 7726.

4. Protect personal information. Fraudsters increasingly use small pieces of publicly available data to build convincing, personalised scams. Limiting what is shared on social media and being cautious about who you share personal details with can reduce exposure.

5. Use multi-factor authentication wherever it's offered, particularly for banking, email, and any account linked to payments, as this remains one of the most effective barriers against account takeover.

6. Report suspected fraud promptly, both to your bank and to Report Fraud. Early reporting improves the chance of recovering losses and helps build the intelligence picture used to stop similar scams reaching others.

7. For businesses, review fraud controls regularly, particularly around payment authorisation and identity verification, given how quickly criminal tactics are evolving alongside the technology.

8. Understand tools available: Use FCA firm checker to check a financial firm is authorised and has regulatory permissions to provide the relevant service.

Notes:

Unless otherwise stated, all figures are from the FCA’s Freedom of Information: Right to know request.

1 "Recovery room scam" combines three categories as classified by the FCA: recovery room (crypto), recovery room (non-shares) and recovery room (shares).

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

●      Scams (23%) and synthetic identity fraud (23%) are now leading cause of losses according to the survey of UK business leaders

●    Over a third (34%) of business leaders report using biometric authentication to tackle the issue, but adoption remains limited 

UK business leaders reported their companies lost the equivalent of 7.4% of their annual revenue in the past year due to fraud, representing £88 billion of fraud losses for the 200 surveyed, according to a new report from global information and insights company TransUnion. Whilst reported fraud losses in the UK were slightly below the global average of 7.7%, it has accelerated sharply in the UK from 5.7% in 2024 to 7.4% this year. 

With threats like AI scams and deepfakes becoming increasingly prevalent, TransUnion’s H2 2025 Update to the Top Fraud Trends Report reveals nearly seven in 10 (69%) UK business leaders are very or extremely concerned about the impact of fraud on their organisation – a sharp rise of 14 percentage points from 55% in 2024. 

“Fraud is now one of the most significant and fast-changing risks to UK businesses,” said Chad Reimers, general manager of Fraud & ID at TransUnion in the UK. “As fraudsters exploit new technologies to create AI scams and deepfakes, and the fraud-as-a-service market burgeons, businesses can no longer rely on traditional detection methods alone. Organisations that invest in robust authentication, identity intelligence, and proactive fraud prevention are best positioned to stay ahead of rapidly evolving threats and to mitigate the significant losses they currently face.” 

UK Faces Higher Risk of Synthetic Identity Fraud 

Alongside scams (23%), synthetic identity fraud (23%), where personal data is combined to create a fabricated identity, are the leading causes of fraud losses in the UK according to the UK business leaders surveyed – above the global average of 20% for synthetic fraud. With the growing accessibility of stolen data and advances in generative AI, synthetic fraud is the biggest driver of fraud losses for telecommunications (31%), financial services (26%), and retail (36%) industries in the UK according to the surveyed business leaders. 

Additionally, one in five (20%) business leaders said fraud losses are caused by account takeover, where fraudsters gain unauthorised access to online accounts, including banking, social media or email. 

Advanced Fraud Detection Tools on the Rise 

The UK is the only region globally to rank device reputation (54%), which detects suspicious or fraudulent behaviour across devices accessing the internet, as the most effective technology for preventing fraud. In all other regions surveyed, traditional identity verification was ranked the most effective technology. 

To better assess risk in real time, advanced, data-driven fraud management strategies are on the rise. Half (50%) of UK business leaders said the most effective technology for preventing fraud is identity verification, while just under half said it’s IP intelligence (48%) and behavioural solutions (48%). 

Biometric Authentication Growing, But Still Underused 

The UK has traditionally been a leader in biometric authentication, with over a third (34%) of business leaders saying they use it as a primary method of authentication. Biometric authentication is the top primary customer authentication method and growing – up from 31% in 2024. Although liveness checks and deepfake detection can combat emerging fraud threats and synthetic identities, biometrics still appear to be underutilised by organisations. 

Meanwhile, nearly two in five (39%) business leaders say they still rely on usernames and passwords as the primary method to authenticate customers to confirm user identity – above the global average of 34%. Username and password can easily be compromised and increase the risk of fraud. Interestingly while the use of social media credentials is declining, 8% of UK business leaders continue to rely on this method for primary authentication. 

“Traditional fraud detection methods alone are no longer enough – in fact, they often can create risk,” continued Chad, “Alongside a more relaxed attitude toward first-party fraud, rising customer expectations for seamless experiences and regulatory changes, business leaders face a wave of challenges to mitigate the growing cost of fraud. By leveraging advanced, data-driven technologies, such as biometrics and device intelligence, businesses can reduce the risk of fraud loss and enhance the customer experience.”   

To find out more about fraud trends in the UK, you can download the H2 2025 Update to the Top Fraud Trends Report here. 

Notes:

This online survey was conducted in Canada (200 respondents), Hong Kong (200) India (200), and the Philippines (200), UK (200) and US (200) from May 29–June 6, 2025 by TransUnion in partnership with third-party research provider, Dynata.  

The survey targeted managerial roles with responsibility for risk and/or fraud at businesses in which primary customer bases were consumers, and with a minimum annual revenue of CAD$300M in Canada, HK$200M in Hong Kong, 1B in India, 1B in the Philippines, £200M in the UK and USD$200M in the US.  

According to TransUnion’s Consumer Pulse survey, 14% of UK respondents reported they had lost money to fraud in the last year aloneⁱ, through various methods including third-party seller scams, fraudulent charges, and account takeover. Notably, consumers are increasingly favoring account security over ease of access, with over three quarters (78%) of consumers stating they don’t want access to their accounts without being explicitly authenticated first, and nearly half (49%) stating they don’t mind being authenticated again after an initial login – for example, when making a payment or changing a password.

“Consumer expectations are challenging the status quo for organisations as they design their digital experiences,” said Chad Reimers, general manager of fraud & identity at TransUnion in the UK. “Quick and seamless journeys have become the norm. However, consumers are increasingly demanding trust as part of their interactions with digital channels. There are increasing demands from consumers to ensure security and authentication – and this spans across sectors, from financial services, to gaming, to online dating. These demands are challenging businesses to consider holistic data and technology capabilities to build out trust signals via identity, digital, and device attributes”.

UK suspected digital fraud rates decline, driven by more robust measures

The rate of suspected digital fraud attempts in the UK among TransUnion TruValidate™ Device customers reduced from 6.4% in 2020 to 3.0% in 2024, following the peak seen during the pandemic.

This level of suspected fraud contrasts markedly with increasing external fraud pressures and is due – in part – to organisations optimising their fraud prevention strategies, employing more advanced analytical capabilities, and enhancing underlying data such as device recognition and non-human activity detection.

Online Communities and Video Gaming Among Top Industries Targeted by Suspected Digital Fraud Globally

Online Communities, which include organisations such as online dating and forums had the highest rate of suspected digital fraudⁱⁱ attempts globally in 2024. Nearly 12% of all attempted transactions occurring in online communities were suspected to be digital fraud last year. This is closely followed by video gaming (11%), gaming (including online betting, poker, etc.) at 8%, and retail (8%) rounding out the top four.

While gaming saw a significant year-over-year (YoY) volume change (up 20%), telecommunications (-79%), insurance (-29%) and video gaming (-23%) saw the greatest decreases in suspected digital fraud volume YoY.

“Digital fraud on community platforms is by no means a new phenomenon. However, in 2024, it appears that fraudsters targeted these areas with a renewed vigor,” said Richard Tsai, senior director of global fraud solutions at TransUnion. “Cybercriminals, taking advantage of the trust inherent on community-based platforms, targeted members with a wide range of scammer solicitations, the most reported type of digital fraud in communities.”

Online Communities Saw the Highest Suspected Digital Fraud Rates in 2024 Globally, While Gaming Saw the Greatest Volume Increase

Source: TransUnion TruValidate™

The UK has followed this global trend, as online communities became a key target sector for fraudsters in the UK, with both the risky rate and volume of suspected fraudulent transactions increasing by 35% and 30% respectively in 2024 for transactions where the consumer or fraudster was located in the UK.

TransUnion came to its conclusions about digital fraud based on intelligence from TransUnion TruValidate. To find out more about fraud trends in the UK, you can download the 2025 UK Fraud and Identity Report, which includes UK sector deep-dives into Financial Services, Gaming, Insurance, and Online Communities.

Notes:

ⁱ TransUnion’s Q1 2025 Consumer Pulse study, which is based on the survey of 1,000 adults 18 years of age and older in the UK, conducted between 10 and 17 Feb. 2025.

ⁱⁱ 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. 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 represents every country worldwide and not just the select countries and regions.

"The latest Crime in England and Wales figures from the Office for National Statistics reveal that fraud continues to remain high, with offences having increased by 33% (to 4.1 million) in the year ending December 2024. The increase in consumer and retail fraud by 35% since the previous report, comes as TransUnion’s latest Q4 2024 Consumer pulse found that over two in five (43%) UK adults have been targeted by online, email, phone call or text messaging fraud attempts in the last three months.

“Over the past year, the fraud threat in the has UK continued to rise. The latest ONS statistics support recent TransUnion insight which shows an increase in identity risk and impersonation fraud, which is – in part - correlated with higher volumes of digital transactions. Given these trends, organisations are considering their most effective defences. In particular, we are observing a parallel shift to expanded use of data insights – including identity, digital, and device attributes and incorporating advanced technology solutions, such as biometrics and document verification.   As noted by the ONS, some of the increase in reported fraud is related to improved data-sharing, which should be viewed as a positive development – industry collaborating effectively is critical in developing effective fraud prevention responses. There may also be an element of consumers responding positively to heightened education measures and being more confident in reporting fraud incidents.

“What is clear, is that fraud will remain a threat to business and organisations. In this climate, it’s more important than ever for financial institutions to stay vigilant by investing in smarter, forward-looking strategies that can effectively detect and disrupt evolving fraud threats.”

·       11% don’t see an issue with putting yourself as a named driver on a vehicle for someone else, even though you don’t drive it

·       7% say it’s acceptable to exaggerate or downplay your income in an application

·       Gen Z and Millennial consumers are more likely to consider giving false information with 44% of 18–24-year-olds and 38% of 25-34-year-olds indicating so.

While the vast majority of consumers stay honest, UK businesses still face a battle against first-party fraud as financial pressures persist – according to new data from global information and insights company TransUnion.

Despite sustained cost of living pressures, with data showing that almost half of people (43%) feel their household income is not keeping up with inflationⁱ, 74% of consumers still say they would be unlikely to give false information to get a preferential rate on a financial product. However, 19% of adults admit they would consider providing incorrect details to get better rates – with the rest being unsure.

Chad Reimers, General Manager of Fraud & Identity at TransUnion in the UK, continues: “First-party fraud is a perennial issue for organisations and that’s why it is essential to have effective data and technology solutions in place to facilitate trust between consumers and providers. TruValidate from TransUnion delivers an accurate and comprehensive view of each consumer by linking proprietary data, personal data, digital attributes and device identifiers, meaning you can protect your business by identifying anomalies and misrepresentation while still offering a personalised, friction-right experience for customers to help achieve safe, smart top-line growth.”

The link between financial insecurity and falsifying information

Demonstrating the link between financial insecurity and potentially falsifying information, Gen Z and Millennial consumers are significantly more likely to be driving this trend than other age groups.ⁱⁱ In order to get a better rate, 44% of 18–24-year-olds indicate that they would consider giving incorrect personal details, while 38% of 25-34-year-olds say the same.

The trend also indicates that consumers may lack awareness of alternative, legal ways to get better deals. This can include taking more time to shop around, accessing pre-approved deals for financial products, or crucially, checking your credit score and taking simple steps to improve it.

In fact, 86% of people who used a credit monitoring service in the past say that it ended up helping them with their finances in at least one way. This includes identifying action steps to improve credit scores (31%), checking for fraudulent credit applications using their ID (27%), or identifying opportunities to refinance their current loans or obtain a lower rate on a credit card (19%) – all of which can eliminate the need to consider giving false information.

What consumers consider acceptable to falsify

In terms of what types of false information are seen as most acceptable by consumers to give to financial providers, one in six (16%) say they have no problem with opening an account with a different email address to access a preferential rate or offer for new customers.

Meanwhile, 11% don’t see an issue with putting yourself as a named driver on a vehicle for someone else, even though you don’t drive it. A similar proportion (9%) think the same about receiving money from a third party into your bank account and forwarding on to someone else in exchange for commission. Just 7% say they think it is acceptable to exaggerate or downplay your income in an application.

However, it is important for consumers to remember that even changing a small detail or two can technically count as committing fraud, which comes with big legal and financial risks to the individual but also drives up the costs of doing business to organisations, leading to increased prices of goods and services.

Learn more about TransUnion’s TruValidate solutions, visit the website.

Notes:

ⁱ Data from TransUnion’s Consumer Pulse study, which is based on a survey of 1,000 adults in the UK, conducted between 1 and 7 May 2024.

ⁱⁱ Generations are defined as follows: Gen Z, born 1995–2005; Millennials, born 1980–1994.

·       11% don’t see an issue with putting yourself as a named driver on a vehicle for someone else, even though you don’t drive it

·       7% say it’s acceptable to exaggerate or downplay your income in an application

·       Gen Z and Millennial consumers are more likely to consider giving false information with 44% of 18–24-year-olds and 38% of 25-34-year-olds indicating so.

While the vast majority of consumers stay honest, UK businesses still face a battle against first-party fraud as financial pressures persist – according to new data from global information and insights company TransUnion.

Despite sustained cost of living pressures, with data showing that almost half of people (43%) feel their household income is not keeping up with inflationⁱ, 74% of consumers still say they would be unlikely to give false information to get a preferential rate on a financial product. However, 19% of adults admit they would consider providing incorrect details to get better rates – with the rest being unsure.

James Robinson, Managing Director of Consumer Interactive at TransUnion in the UK, comments: “It is heartening to see that most people stay honest when applying for financial products, despite experiencing continued strain on their finances – and that should be commended. It is also important to remember that not everybody who says they would give false information ends up doing so. But even a relatively small minority of consumers doing so can cause big headaches for financial providers – and risks for the individuals involved.”

The link between financial insecurity and falsifying information

Demonstrating the link between financial insecurity and potentially falsifying information, Gen Z and Millennial consumers are significantly more likely to be driving this trend than other age groups.ⁱⁱ In order to get a better rate, 44% of 18–24-year-olds indicate that they would consider giving incorrect personal details, while 38% of 25-34-year-olds say the same.

The trend also indicates that consumers may lack awareness of alternative, legal ways to get better deals. This can include taking more time to shop around, accessing pre-approved deals for financial products, or crucially, checking your credit score and taking simple steps to improve it. See below for tips from TransUnion.

In fact, 86% of people who used a credit monitoring service in the past say that it ended up helping them with their finances in at least one way. This includes identifying action steps to improve credit scores (31%), checking for fraudulent credit applications using their ID (27%), or identifying opportunities to refinance their current loans or obtain a lower rate on a credit card (19%) – all of which can eliminate the need to consider giving false information.

What consumers consider acceptable to falsify

In terms of what types of false information are seen as most acceptable by consumers to give to financial providers, one in six (16%) say they have no problem with opening an account with a different email address to access a preferential rate or offer for new customers.

Meanwhile, 11% don’t see an issue with putting yourself as a named driver on a vehicle for someone else, even though you don’t drive it. A similar proportion (9%) think the same about receiving money from a third party into your bank account and forwarding on to someone else in exchange for commission. Just 7% say they think it is acceptable to exaggerate or downplay your income in an application.

However, it is important to remember that even changing a small detail or two can technically count as committing fraud, which comes with big legal and financial risks to the individual but also drives up the costs of doing business to organisations, leading to increased prices of goods and services.

Top tips from TransUnion that could help get a better deal on financial products

1. Check Your Credit Score Regularly

Monitoring your credit score can help you understand your financial health and identify simple steps to improve it – such as making sure you are on the electoral register and setting up Direct Debits for minimum repayments – all boosting your chances of qualifying for better rates.

2. Look for Pre-Approved Offers

Take advantage of pre-approved deals from financial providers. These are tailored to your credit profile, saving time and increasing your chances of approval.

3. Consider Alternatives Like Credit Unions

Credit Unions often offer competitive rates and flexible terms, providing an ethical and community-focused alternative.

4. Refinance or Negotiate Existing Deals

Use credit monitoring tools to spot opportunities to refinance loans or secure lower rates on credit cards, saving money without needing to look elsewhere.

5. Stay Vigilant Against Fraud

Regular credit monitoring can alert you to suspicious activity or fraudulent applications, protecting your finances and making sure you aren’t being held back by the actions of others.

Notes:

ⁱ Data from TransUnion’s Consumer Pulse study, which is based on a survey of 1,000 adults in the UK, conducted between 1 and 7 May 2024.

ⁱⁱ Generations are defined as follows: Gen Z, born 1995–2005; Millennials, born 1980–1994.

"The latest Crime in England and Wales figures from the Office for National Statistics have revealed that while overall volume of incidents of fraud showed no significant change in the year ending June 2024, there was a 19% increase in consumer and retail fraud. This correlates with – and continues - recent trends observed in similar sectors via TransUnion’s State of Omnichannel Fraud Report, where we have seen risky transactions rise by 33% in Retail and by nearly 10% in the Communities sector (including market-places and online dating). This is also consistent with recent stats comparing H1-24 to H1-23 published by UK Finance (16% increase in total cases) and Cifas (15%), demonstrating that more efforts continue to be required to drive awareness for consumers and for organisations to implement the right onboarding and monitoring controls, using a range of data signals and technology.    

"Over the past year, the fraud landscape has continued to evolve, and we have seen shifts in fraudsters targeting retail and e-commerce sectors, particularly through chargebacks, delivery fraud, and a cross-over into the telco sector via handset delivery scams. Often these techniques then impact consumers of financial services organisations via the use of mule accounts and authorised push payment scams. Organisations need to ensure they are building data-informed customer journeys, which not only identify potential fraud risk, but also aim to increase trust with consumers, based on a holistic understanding of their identity, digital attributes, and relevant device footprints.”

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 

 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. 

The industry recognition at the Credit and Collections Technology Awards acknowledges the pivotal role that TransUnion’s flagship TruValidate solution plays in addressing the challenge of delivering robust fraud prevention tools, whilst maintaining streamlined consumer onboarding and friction-right customer experience.

Chad Reimers, general manager for fraud & ID at TransUnion in the UK said: “We are honoured to have received this accolade for the second year in a row, recognising the tangible benefits we have delivered for our customers across sectors. At TransUnion, we have built on our proud legacy to continually advance our solutions to adapt to the ever-evolving challenges our customers face, helping us to make trust possible between businesses and consumers.

“Our TruValidate solution provides businesses with unique insights about consumer digital transactions – helping businesses to spot fraud and safeguarding potentially tens of millions of transactions each day. This award highlights the dedication and hard work of our colleagues, who work hand-in-hand with our customers to achieve the right bespoke solution for their needs.”

A recent TransUnion survey found that 44% of UK consumers were targeted by online, email, phone call or text message fraud between August and October alone, with 7% having subsequently become a victim.ⁱ This highlights the ongoing need for businesses to be vigilant and make the protection of consumers a leading priority.

The highly configurable TruValidate suite incorporates identity proofing, risk-based authentication and fraud analytics, and delivers an actionable and robust view of each consumer by linking proprietary data, personal data, device identifiers and online behaviours. This allows hundreds of organisations across different industries, including Banking, Fintech, Gaming, and more, to help protect their businesses and focus on offering effective, personalised and friction-right experiences through a light-touch and flexible integration. 

The Credit and Collection Technology Awards highlight the success of companies that lead the way in the credit industry, with a focus on how technology supports the sector in developing and enhancing best-in-class solutions.

Learn more about TransUnion’s TruValidate solution, visit the website.

Notes:

ⁱ TransUnion’s Q4 2023 Consumer Pulse study which is based on a survey of 998 adults in the UK conducted 25 Sept – 3 Oct. 2023

New data shows that the rate of suspected digital fraud – when a consumer or a fraudster is in the UK during a transaction – in the first half of 2023 is up 16% in the retail sector in comparison to the second half of 2022. At the same time, gambling remains the industry with the largest volumes of digital fraud and an increase of 6% when compared to the second half of 2022.ⁱⁱ 

"The rise in the rate of suspected digital fraud attempts in the retail sector is a worrying trend," said Chad Reimers, general manager of fraud and ID at TransUnion in the UK. "This is likely due to a number of long-term factors, including the popularity of online shopping and the growing sophistication of fraudsters. Meanwhile, charge-back fraud – where customers dispute genuine, successfully delivered online purchases with their bank or credit card provider – remains a significant challenge, particularly in light of the growing cost of living." 

TransUnion’s recent surveyⁱⁱⁱ shows that two fifths (40%) of UK adults said they had been targeted by online, email, phone call or text messaging fraud in the period between April and July 2023. Many of the fraud attempts reported by those consumers could potentially end up being a step towards retail fraud – whether that's third-party seller scams, stolen credit cards or account takeovers. 

Consumers who said they were targeted by fraud were most likely to experience phishing (46%), vishing (36%) or smishing (34%) attempts. These are all types of fraudulent activity where criminals try to trick people into giving them their personal information via email, phone calls or texts respectively. Vishing – or phishing via phone calls – in particular has seen a rise from 25% in the TransUnion 2023 State of Omnichannel Fraud Report^iv relative to other tactics.  

Chad Reimers continues: "With 78% of consumers globally ranking the security of their personal data as ‘very important’ when choosing who to transact with online,^iv businesses need to be proactive in their approach to fraud prevention. Fraud can be a real ‘moment of truth’ for the trust between a customer and business, so the right fraud mitigation can become a key pillar of a customer proposition. This includes applying a layered approach with the latest technology and information to provide strong authentication measures and monitor for suspicious activity. 

"At TransUnion, we help businesses stay ahead of the curve to protect their customers and their bottom line by offering fraud analytics and cutting-edge device and behavioural insights, as well as the latest technology advancements in document verification, to help stop fraud in real time, while limiting the friction in the user experience for genuine customers." 

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, healthcare, insurance, retail, and travel and leisure, among others. TransUnion came to its digital fraud findings based on intelligence from its identity and fraud product suite – TruValidate.^v

Download the Omnichannel Fraud in H1 2023 Infographic for more findings. 

Notes:

ⁱ The first half of the year or H1 refers to 1 January to 30 June. The second half of the year or H2 refers to 1 July to 31 December.

ⁱⁱ TransUnion TruValidate's data.  

ⁱⁱⁱ Unless otherwise stated, subsequent consumer data comes from TransUnion’s Q3 2023 Consumer Pulse survey of 1,000 adults in the UK, conducted 6–17 July, 2023.

^iv Findings from TransUnion consumer survey of 13,383 adults in 18 countries and regions globally including 1,000 UK adults from 8–23 Dec. 2022.

^v The rate or percentage of suspected digital fraud attempts reflect interactions in which TransUnion customers were either denied in real time due to fraudulent indicators or were determined to be fraudulent after a manual review process—as compared to all transactions it assessed for fraud.
 

The National Credit Awards recognise remarkable achievements in the UK credit space, honouring outstanding professionals and firms which contribute towards raising the standards within the credit arena.

This year, TransUnion was named Credit Information Provider of the Year for its achievements in several areas, including promoting credit education through its CreditView solution, supporting businesses and consumers in the current economic climate with its enhanced Affordability Report and Affordability Screening, as well as helping identify and reduce fraud with TruValidate.

“We’re honoured to have received this recognition, which is a testament to our mission of using information for good to support businesses and consumers through the current challenging economic conditions,” said Kelli Fielding, chief product officer at TransUnion in the UK. “This award highlights our commitment and quick action in helping lenders to have better insights into the consumer’s financial position to enable more informed decisions, whilst equipping consumers with the tools to improve their financial wellbeing.”

TransUnion was also highly commended in the Innovation Award, attributed to the company’s guidance for finance providers on the credit reporting aspects of the Mortgage Charter relief scheme, as well as using enhanced data and insights to support businesses as they address the requirements of the new Consumer Duty regulation from the Financial Conduct Authority (FCA).  

To find out more about TransUnion’s product and solutions, visit the website.

"The latest Crime in England and Wales figures from  Office for National Statistics for the year ending June 2023 reveal that there's a promising 13% decrease in reported fraud offenses compared to the prior year. In the meantime, there is a 15% rise in police-recorded fraud, driven by increased cases reported by industry bodies such as UK Finance and Cifas. This is likely due to consumers being more equipped to report instances where they have fallen victim to fraudulent activity. 

“Although the overall reports of fraud have declined, we know from TransUnion’s 2023 State of Omnichannel Fraud Report that digital fraud attempts originating from the UK have increased in specific sectors. In light of this, it remains essential for finance providers to be vigilant and make the protection of consumers a leading priority.” 

As an innovator in the credit industry, Tymit offers an alternative to traditional credit cards and buy now, pay later offerings and launched the world’s first instalment credit card. However, the credit card service experienced an increase in fraudulent applications, with the most prevalent cases relating to identity theft and impersonation.ⁱ  

Tymit immediately implemented additional controls, including selfie-based document verification, but found that whilst they saw the fraud rate decline, there was a level of additional friction for genuine customers. Tymit asked TransUnion to provide a fraud prevention solution that would deliver the right balance between the two priorities and was tailored to their unique circumstances. 

“We're proud to have partnered with Tymit to help the organisation improve its fraud prevention and customer experience,” said Chad Reimers, general manager of fraud and ID at TransUnion in the UK. “In order to support Tymit, we’ve implemented bespoke layered fraud controls based on our award-winningⁱⁱ TruValidate solution, which resulted in reduced friction for 87%ⁱ of credit applications without compromising on fraud detection rates.” 

TransUnion developed a bespoke Digital Risk scorecard for Tymit that took into account a sample of 10,000 application records and identified strategies that could be used to reduce potential fraud without impacting the customer experience. After testing these strategies, Tymit identified that the most efficient suite for their needs included Device Risk, Mobile Risk, Email ID, Mobile ID and Real Time Fraud Alerts features.  

As a result of the partnership with TransUnion, Tymit has seen an almost five-fold reduction in false positive rates (where genuine transactions may be flagged) and been able to identify incremental fraud cases that could have been missed with Tymit’s existing controls.

Bis Das, VP of risk at Tymit, added: “We are committed to providing our customers with a streamlined experience, financial peace of mind and full control over their spending and repayments. Working with TransUnion has allowed us to do this while also reducing fraud. We are now able to apply our document and selfie controls more effectively to different stages of a customer journey.” 

To find out more about TransUnion’s flagship identity proofing, risk-based authentication and fraud analytics solution suite, TruValidate, visit https://www.transunion.co.uk/solution/truvalidate

To learn more about how TransUnion enabled Tymit to reduce genuine customer friction and mitigate fraud risks, read our case study.

Notes:   

ⁱ Based on Tymit platform data

ⁱⁱ  TransUnion Scoops Double Win at the Credit and Collections Technology Awards

“The latest fraud figures from the Office for National Statistics reveal that overall fraud rates have returned to pre-pandemic levels. This would align with typical fraud patterns, where fraudsters adapt their targets and tactics in line with sudden changes in consumer behaviour. It may also be linked to improved controls that were widely implemented alongside the increased levels of fraud observed during the pandemic period. Organisations, however, should not take their eye off this ever-changing context.

“Some types of fraud have decreased, including bank and credit account fraud which was down by 14%. However, a cause for concern is the persistent rise in advance fee fraud, which has experienced 549% growth when comparing the year ending March 2020 to the year ending March 2023. This type of fraud includes scams where victims transfer funds to fraudsters, with a recent spate of these linked to postal deliveries – preying on the increase in online shopping and potentially also the increasing return to office-based work.

"This links with what we’ve found in our recent Consumer Pulse study, which indicates that phishing and social engineering fraud continue to plague consumers, while the latest Fraudscape report from Cifas finds an 180% increase in the number of companies targeted for identity fraud.

“As businesses navigate this ever-shifting landscape, safeguarding their customers must remain a top priority. Having recently hosted a series of FinCrime roundtables with our clients, debates have centred on the balance organisations face in terms of education – from making customers aware of scams and third-party fraud, to helping them recognise that a level of friction in the customer experience can help protect individuals. Therefore, organisations need to remain vigilant in fortifying against emerging threats, ensuring the consumer remains at the forefront of their fraud prevention and identification strategies.”

“The latest fraud figures from the Office for National Statistics for the year to September 2022 show that bank and credit account fraud decreased by 14% to 2.1 million offences. This may be testament to the increasing levels of control that finance providers are putting in place to help stop fraud and raise awareness of scams.

“However, advanced fee fraud, which includes scams for services paid upfront that never arrive, has increased ninefold to 546,000 offences when compared with the year ending March 2020. This illustrates fraudsters adapting to changing habits, with consumers more susceptible than ever to phishing and online scams, such as bogus discounts, phoney competitions and fake offers as they explore online money saving deals.

“Our recent Consumer Pulse study showed that nearly half (48%)ⁱ of UK consumers were targeted by phishing activity in the last quarter of 2022, highlighting the scale of the continuing fraud threat and the need for businesses to continually evaluate and evolve their fraud prevention solutions to ensure consumers are protected.”

Notes:

ⁱ TransUnion’s Consumer Pulse Q4 2022 UK Study, based on a survey of 981 UK adults from 3–14 Nov, 2022

The new findings indicate that the share of suspected digital fraud during this period, which traditionally marks the start of Christmas shopping, reached its peak on Cyber Monday (22%), 28 November. Meanwhile, Black Friday – 25 November – and Sunday 27 November (both 21%) were close behind. However, the amount of potential fraud was high in all of the surrounding days, and with gift buying likely to continue in the run-up to the festive season, the increase in volume of ecommerce transactions relative to the rest of the year may well continue to cause issues.

Shail Deep, chief product officer at TransUnion in the UK, said: “Fraudsters shift focus and align to consumer behaviour, so just as the start of the seasonal shopping period signals a boom in purchases, it also means a sharp increase in fraud attempts. The recent rapid digital acceleration we’ve seen is here to stay, and many will be doing their festive shopping online. This means digital fraud poses a high risk, and it’s crucial that retailers use every tool at their disposal to protect themselves and their customers.”

TransUnion’s analysis shows that the start of the 2022 festive shopping season saw a significant spike in digital fraud, as around one in six (17%) ecommerce transactions in the UK between 24 November and 28 November were suspected to be fraudulent. These findings are based on intelligence from billions of transactions contained in TransUnion’s TruValidate fraud analytics solution suite.

Josh Gunnell, director of fraud & ID at TransUnion in the UK, said: “Clearly, digital fraud remains a big risk for retailers to grapple with. Having the right protections in place is critical. But it’s also essential to provide consumers with necessary information that can help prevent them falling victim – particularly in a challenging economic environment.

“With the rising cost of living and financially vulnerable consumers becoming ripe targets for scammers, retailers will be working hard behind the scenes in the lead-up to the festive season to protect consumers while offering them a seamless shopping experience that minimises unnecessary friction.”

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, healthcare, insurance, retail, and travel and leisure, among others. The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in TransUnion’s flagship identity proofing, risk-based authentication and fraud analytics solution suite – TruValidate.
 

Notes:

ⁱ Refers to the period between 24 and 28 November 2022

ⁱⁱ Refers to the period between 1 January and 23 November 2022

ⁱⁱⁱ The percent of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud

The awards highlight the success of companies that lead the way in the credit industry, with a focus on how technology supports the sector in developing and enhancing best-in-class solutions.

“We’re honoured to have received these accolades which reflect the key role data and analytics play in supporting businesses and consumers,” said Satrajit “Satty” Saha, CEO of TransUnion in the UK. “Innovation in Credit recognises our pioneering work in the buy now, pay later space – as the first UK credit reference agency to bring this data into consumer credit reports – whilst our global fraud solution was named as the industry leader. I want to thank all our dedicated colleagues for their hard work and enthusiasm in helping us to continually advance our solutions to adapt to the ever-evolving challenges our customers face.”

Leading the Way with Innovation in Credit

TransUnion has a long track record in innovation, and addressed the challenges of bringing buy now, pay later data into credit reports by conducting extensive analysis, as Shail Deep, chief product officer explains: “We’ve worked closely with leading buy now, pay later companies and industry bodies to create new guidance, as well as developing new search types for buy now, pay later – also known as deferred payment credit.  The inclusion of this new information will support consumers by making these payments visible, helping to create a more complete view of their financial situation.”

Throughout the year, TransUnion has helped steer this evolution, informing and educating both businesses and consumers. A leading presence at industry events like the AltFi Festival of Finance and the inaugural BNPL Symposium, the company has also hosted roundtables with finance providers and regulators to facilitate debate and help drive progress. At the same time, TransUnion has raised awareness amongst consumers, creating a dedicated support centre and working closely with its partners that provide TransUnion credit reports and scores.

Best Anti-Fraud Solution

Changes in consumer behaviour have seen fraud levels soar in recent years, with a recent TransUnion survey showing more than seven in 10ⁱ UK consumers have been targeted since the cost of living crisis worsened. With increasingly sophisticated cyber attacks and scams, combatting fraud is a key priority for businesses.

Speaking of the win for TransUnion’s global fraud solution, Shail Deep said: “Our flagship TruValidate solution fuses traditional data science with machine learning to provide businesses with unique insights about consumer transactions – helping businesses to spot fraud and safeguarding tens of millions of transactions each day. That’s what this award is all about, as these solutions help us to make trust possible between businesses and consumers.”

TruValidate™ incorporates identity proofing, risk-based authentication and fraud analytics and delivers an actionable and robust view of each consumer by linking proprietary data, personal data, device identifiers and online behaviours.

The industry recognition at the Credit and Collections Technology Awards acknowledges the pivotal role this solution plays in addressing the challenge of delivering robust fraud prevention tools whilst maintaining streamlined consumer onboarding and friction-right customer experience.

Learn more about TransUnion’s credit, collections and fraud solutions here: https://www.transunion.co.uk/business

Notes:

ⁱ Research carried out amongst 2,000 UK consumers by an independent research agency on behalf of TransUnion in August 2022

“The latest quarterly figures from the Office for National Statistics show that fraud, overall, returned to pre-pandemic levels at the end of June 2022. However, instances of ‘advance fee fraud’, where scammers request upfront payment for services that never arrive, have continued to surge – rising tenfold since March 2020 to 611,000 offences. This demonstrates how fraudsters are continuing to take advantage of shifts in consumer behaviour and the growth of online purchases and transactions.  

“The cost of living crisis also presents further challenges when it comes to cybercrime, as fraudsters are adapting their strategies to target consumers’ vulnerabilities. Our recent survey showed more than seven in 10 (73%)ⁱ UK consumers have been targeted by fraud amidst the rising cost of living, with scams including fake tax rebates, bogus energy discounts, fictitious ‘get rich quick’ investment schemes and phoney competitions. 

“Over three in 10 (31%) UK adultsⁱ believe fraudsters are becoming harder to spot with more sophisticated scams and a similar number say more education is needed to help stamp out digital fraud. It’s encouraging to note that the Payment Systems Regulator (PSR) has recently set out proposals to give greater protection against authorised push payment scams to protect consumers against scam losses and reduce fraud.ⁱⁱ  

“Our recent research highlighted the great strides that have been made, with almost a third (32%)ⁱ of consumers agreeing banks and finance providers are doing more to warn people about new scams but it’s an ongoing task. Finance providers should take all necessary steps to minimise risks using robust fraud prevention tools and continuing consumer education.”

Notes:

ⁱ  Research carried out amongst 2,000 UK consumers by an independent research agency on behalf of TransUnion in August 2022

ⁱⁱ Payment System Regulator, 29 September 2022 https://www.psr.org.uk/news-updates/latest-news/news/psr-sets-out-proposals-to-give-greater-protection-against-app-scams/

Whilst consumers are becoming more vigilant, increasingly sophisticated scams have led to more than one in four (26%) falling victim, with total financial losses of over £7.9 billion since the beginning of May.ⁱ

Common scams include fake tax rebates that are supposedly from the government (38%), bogus energy companies offering a discount (38%), offers which claim to be from insurance companies promising a cheap deal (37%) and phoney social media competitions offering free holidays (36%).

Fake investments are also common, with scammers using sham endorsements to lure people in. More than a third (35%) of consumers have been targeted by false cryptocurrency schemes promoted on social media, with what appear to be testimonials from celebrities.   

Kelli Fielding, TransUnion’s managing director of consumer interactive, explains: “We know fraudsters prey on our fears and worries, and the cost of living crisis is providing them with the perfect opportunity, giving rise to an abundance of scams. The average financial loss is £581, which is actually around half of what it was last year,ⁱⁱ but sadly the sheer volume of fraud and the increasingly convincing nature of the scams means more people have fallen victim, rising from 14% last yearⁱⁱⁱ to 26%. 

“Our research showed around half (51%) of consumers say the increased cost of living has made them more vigilant towards fraud, which is good news, but we’d encourage everyone to be extra cautious and treat any unexpected text message, email or phone call as a potential phishing attempt. If you’re being asked for your bank details or other personal information, consider this a red flag and, if in doubt, check with the company directly by calling their official phone number.”

Nearly one in three (32%) consumers agree banks and finance providers are doing more to warn people about new scams – either by sending out alerts when money is being transferred, flagging the latest scams or building in authentication systems to make them think twice before paying for something. Yet the same number (32%) say more education is needed to help stamp out digital fraud.   

Among all adults, close to half (46%) would contact their bank or finance provider if they’d been targeted or fallen victim to a scam and over a third (34%) would alert the legitimate company the fraudster was pretending to be from. Others said they would report scams to Action Fraud, the police or an industry regulator such as the FCA, Ofcom or Ofgem. Over a fifth (21%) would check their credit report to spot evidence of the scam.

Kelli Fielding continued: “It’s great to see people are keeping an eye on their credit report for signs of fraud. Your credit information gives a full picture of your credit history so if someone else has fraudulently used your identity to apply for credit, it will be visible here. Regularly checking your credit report helps you monitor and manage your financial health – so it’s important to identify anything that doesn’t look right so you can get it corrected.”

TransUnion’s tips to help reduce cost of living fraud:

·        If it seems too good to be true, it probably is! For example, scammers pretending to be companies offering unlikely discounts or unusual offers, such as a free holiday or an investment with a guaranteed win

·        Be wary of telephone calls, messages or emails offering a rebate or refund – typically scammers are pretending these are from energy companies or HMRC.  Do not follow any links but if you think it may be genuine then call the organisation directly on their official number and ask for information

·        Avoid clicking links or downloading attachments from unexpected emails or messages from a brand or business, unless you’re sure you know the origin. These could release malware onto your device or steal your bank details. It’s okay to ignore emails or messages that are unsolicited

·        Check the webpage is genuine. When online, make sure the webpage you are visiting is HTTPS protected or shows a padlock – both of which can be spotted in the domain bar. This indicates that it’s secure

·        Regularly check your credit report. This will help you to understand and protect your financial standing. It can also help you monitor for fraudulent activity as if someone tries to use your identity, this is one of the places you’re likely to spot it. You can check your TransUnion credit report and score for free with Credit Karma, Credit Monitor from MoneySuperMarket, or TotallyMoney

·       Report fraud to Action Fraud if you think you’ve been a victim. Or if you’ve received an email which you’re not quite sure about, you can forward it to the Suspicious Email Reporting Service at: report@phishing.gov.uk 

Notes:

i 26% of UK consumers have fallen victim to a scam, at an average of £581. According to latest ONS figures, the current UK adult population is 52,673,433, which means 13,695,092 consumers have collectively accumulated a loss of £7,956,848,452

ii TransUnion research in May 2021 surveyed 2,000 UK consumers and found the average financial loss of those who had fallen victim to fraud was £1,149

iii TransUnion research in May 2021 surveyed 2,000 UK consumers and found that 14% had fallen victim to fraud since the pandemic began

In financial services, the rate of suspected digital fraud attempts has more than doubled in this period (up 260%), as fraudsters capitalise on the digital acceleration seen during the pandemic. The insurance sector is close behind (up 257%), with the most common digital fraud type reported to TransUnion by companies in this sector being first party application fraud, where policy holders provide inaccurate information to get lower rates or better terms.  

Several other industries also saw an increase in online fraud attempts originating in the UK, including telecommunications, retail and logistics. 

“In recent years, we’ve seen fraudsters routinely shift focus across industries, aligned to changing consumer habits and rapid digital acceleration,” said Shail Deep, chief product officer at TransUnion in the UK. “In particular, industries that have seen major shifts towards a digital user experience are ripe targets and that’s why financial services and insurance are experiencing such significant increases. Businesses across all areas must be vigilant and adopt advanced analytical tools that use global datasets to ensure robust fraud prevention and authentication processes.” 

Globally, the rate of suspected digital fraud attempts declined by approximately 14% year-over-year in Q2 2022. Similarly, the UK saw significant decreases during that time period including gambling (down 53%), travel and leisure (down 38%) and communities, which includes online dating sites and forums (down 25%). 

However, digital fraud continues to be a constant in the lives of many consumers in the UK, with continuing cost of living pressure encouraging some to engage in fraudulent activity. TransUnion’s latest Consumer Pulse study found that nearly a third (30%) of adults in the UK reported experiencing digital fraud attempts and 3% of those fell victim in the last three months.ⁱⁱ 

Josh Gunnell, director of fraud & ID at TransUnion in the UK, added: “Mirroring recent industry figures, our data affirms that phishing remains the top type of digital fraud, accounting for 36% of attempts reported by consumers in Q2. This was followed by money or gift card scams (23%) and third-party seller scams (17%). Although long-established fraudulent activities continue to capture victims as well; 15% of respondents were targeted by card theft or fraudulent charges, and 12% by attempted identity theft.  

“Being able to link proprietary data, device identifiers and online behaviours and tap into a global network of reported fraud can help companies minimise the risk of fraud and confidently identify genuine consumers while maintaining an effective, personalised and friction-right experience.” 

TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate. 

Notes: 

ⁱ The percent or rate of suspected or risky fraudulent digital transaction attempts are those that TransUnion’s customers either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud. 

ⁱⁱ TransUnion’s Consumer Pulse Q2 survey of 1,004 adults, conducted 20 May–1 June, 2022 

“The latest figures from the Office for National Statistics confirm that fraud levels remain persistently high. The data shows a 25% increase compared with the year ending March 2020, at 4.5 million fraud offences. Due to the post-pandemic evolution of consumer behaviour creating new means and avenues for scams to be performed – which fraudsters are actively exploiting – previous upwards trends in consumer and retail fraud have continued to climb in this quarter.

“Particularly concerning are the rising levels of phishing. The ONS data shows that 50% of respondents reported receiving an email, text, or social media message that may have been phishing in the last month. As scams remain prevalent, consumers must be vigilant now more than ever when conducting transactions online.

“Rising levels of fraud come despite ongoing improvements to laws and regulations to help prevent people falling victim. To assure consumer protection, financial services companies must take the utmost precautions to minimise the risks of cybercrime as more consumers continue to conduct their banking digitally.”

“The latest figures from the Office for National Statistics affirm that fraud levels remain concerningly high. The data shows an increase of 41% in fraud overall, compared with the year ending December 2019. Advanced fee fraud and consumer and retail fraud were of particular concern, as fraudsters take advantage of shifts in consumer behaviour due to the pandemic.

“Phishing is confirmed as one of the main methods used to commit fraud, with over half (53%) of respondents surveyedⁱ saying they had experienced attempted phishing in the last month alone. This aligns with the findings in our Global Digital Fraud Trends report, which highlighted phishing as one of the biggest concerns for UK consumers – the majority of whom now manage all their transactions onlineⁱⁱ.

“The challenging events of the war in Ukraine and the cost of living crisis have significantly impacted the cybercrime environment. This means it’s essential for finance providers to ensure they are mitigating digital fraud risks to guarantee customer protection over a potentially challenging next few months.”

 Notes:

i Telephone-operated Crime Survey for England and Wales (TCSEW) 

ii TransUnion’s Global Digital Fraud Trends report, based on 1,000 UK consumers surveyed in January 2022

Among those targeted, the five most common scams faced were phishing (46%), third-party seller scams on legitimate online retail websites (25%), stolen credit card or fraudulent charges (23%), account takeover (20%) and identity theft (15%).

“We’re seeing a high number of digital fraud attempts, which is unsurprising given that more than half of UK consumersⁱ told us they are now conducting the majority of their transactions online – from managing personal finances to weekly food shopping,” said Josh Gunnell, director of fraud and ID for TransUnion in the UK. “Financial services, as well as travel and leisure, recently experienced some of the biggest spikes in fraud attempts. As cyber criminals shift focus to target these industries, it’s imperative businesses have multi-layered identity solutions and strong authentication processes in place to help protect consumers and build trust.”

Globally, TransUnion’s intelligence network found travel and leisure saw the biggest rise in the rate of suspected digital fraud attempts targeting industriesⁱⁱ. It rose 111% globally when comparing 2019 to 2021, whilst suspected digital fraud from the UK against that industry saw a smaller but significant increase of 60% during the same periodⁱ.

TransUnion monitors digital fraud attempts reported by businesses in various industries such as finance, retail, telecommunications, utilities, gaming, government and insurance, among others. The conclusions in its report are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™.

Digital acceleration in the age of COVID-19

The continuous growth of ecommerce has increased the risk of digital fraud and the need to mitigate fraud attempts by putting advanced authentication processes in place. Three in 10 UK consumers said they prefer using one-time passcodes for authenticating their identity when opening a new online accountⁱ.

Such widespread technology adoption has led to high consumer expectations in terms of both experience and security, with 67% of UK consumers saying they have abandoned an online application or form before completing it. Among the top reasons they say they did so is they felt the process was frustrating (52%) or too much information was required (51%). Additionally, over six in 10 (63%) UK consumers say they wouldn’t return to a website if they had a fraud concern or experienced a slow website (41%).

Josh Gunnell continued: “Interestingly, the top four types of digital fraud which UK consumers were most worried about differed slightly from the attempts reported. Our research highlighted the biggest UK consumer concerns were identity theft (53%), credit card fraud (49%) and phishing (39%). At TransUnion, we help businesses prevent fraud by using intelligent predictive solutions to deliver better experiences and reassure customers that their personal data will not be compromised.”

To find out more about TransUnion’s fraud prevention and ID verification services click here. For more information and insights about our global fraud trends, please download the report.

Notes: 

i Based on 1,000 UK consumers surveyed in January 2022

ii The percent or rate of suspected or risky fraudulent digital transaction attempts are based on those that TransUnion customers receiving TruValidate services have either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud.

“The latest quarterly fraud figures from the Office for National Statistics highlight the extent of the impact of the pandemic, with fraud up 36% for the year to September 2021, compared with the year ending September 2019, at 5.1 million fraud offences. Much of this was driven by financial and retail fraud, which is unsurprising, given the behavioural changes and increased digitisation we’ve seen as a result of COVID-19.

“Particularly concerning is the rise in digital fraud within financial services, with UK Finance reporting an increase of 53% in remote banking fraud for the year to September 2021 and financial investment fraud rising 42% for the same period, according to Action Fraud.

“More widely, advanced fee fraud, including the common delivery service scams where victims transferred funds to fraudsters, saw a sizable increase of 18% – from 43,555 to 51,407 offences – in the last year.

“Going into another year where consumers will face a barrage of threats online, it’s more important than ever for businesses to take a rigorous approach to fraud prevention and identify verification. By implementing proactive and predictive solutions that make data-led decisions on potentially fraudulent activity, businesses can help deliver safe experiences, without compromising on the customer journey.

“It’s positive to hear that the UK government is currently drafting its landmark Online Safety Bill. With pressure from lobbyists, it seems a real possibility that new anti-fraud legislation will help tackle the scourge of push payment scams that are served to consumers via paid-for advertising. This could be a major step towards breaking the trend of increased fraudulent activity online, alongside progress being made on the UK’s digital identities trust framework.”

“The latest quarterly figures from the Office for National Statistics confirm that digital fraud levels remain alarmingly high, meaning cyber threats will remain a real concern to businesses and consumers alike. Of particular alarm, is the 71% increase in remote banking fraud (to 94,180 incidents), which proves fraudsters remain unperturbed in their efforts to exploit the surge in new users of internet, telephone and mobile banking technology.

“Unfortunately, this uptick in digital fraud offences isn’t limited to the personal banking space. Rather, the latest data points to a 32% increase in any fraudulent activity compared with the year ending June 2019, including significant increases in consumer and retail fraud, advance fee fraud and other fraud.

“Scammers know people want to get great deals as we approach the festive period, so it creates a perfect storm at peak ecommerce periods to lure those looking to save. With consumers being ushered towards online retailers due to in-store stock shortages and pandemic-related restrictions, this figure could yet increase further, re-emphasising the need for us all to remain hyper vigilant when it comes to spotting the signs of criminal activity online.

“For businesses, this means tackling fraudster’s heightened levels of organisation and technological sophistication by being more proactive and predictive in their fight against fraud. Across all sectors, organisations need to continually review their prevention strategies, adopt data-driven insights and collaborate with each other to gain as much knowledge as possible.”

Across industries, the rate of suspected digital fraud attemptsⁱ rose 17% globally when comparing Q2 2021 to Q2 2020. Travel and leisure was one of the most impacted industries globally for the suspected digital fraud attempt rate, rising 156% in the last year, and was by far the most impacted industry in the UK. The global increase was most commonly driven by credit card fraud.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, healthcare, insurance, retail and travel and leisure, among others. The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™

Sarah Golding, director of fraud and ID at TransUnion in the UK, said: “Cyber-criminals will periodically shift their focus in line with consumer habits and with many countries, including the UK, beginning to relax COVID-19 restrictions, we saw a surge of transactions being targeted in the travel and leisure industry. With people making up for lost time and booking holidays and days out, businesses need to take all possible measures to ensure consumers can trust that their transaction is safe, while maintaining a smooth customer experience.”

Global financial services online fraud attempt rates had risen 149% when comparing the first four months of 2021 and the last four months of 2020. However, when comparing Q2 2021 and Q2 2020, the rate of suspected online financial services fraud attempts has still risen, but at a much lower percentage of 19% globally, reflecting this sudden shift towards other sectors.

Consumer data from TransUnionⁱⁱ reveals that younger people in the UK are likely to be driving this surge in spending across travel, leisure and hospitality as restrictions lift. Among Gen Z, a third (33%) of 18 to 24-year-olds said they will spend more in the pub, and a similar amount (31%) on eating out. Meanwhile, spending on travel will also rise, with almost four in 10 planning to spend on a staycation (37%) and over a fifth on a holiday abroad (22%).

Consumers continue to be targeted by COVID-19 related digital fraud

Fraudsters continued to take advantage of change and uncertainty around the pandemic during the second quarter of 2021. TransUnion’s Consumer Pulse studyⁱⁱⁱ in June 2021 found that more than one in three consumers (36%) in the UK had been targeted in a digital fraud attempt related to COVID-19. That rose to one in two for the most targeted generation, Gen Z (50%).

Phishing is the most common type of COVID-19 related digital fraud in Q2 2021 and was reported by 39% of targeted consumers in the UK, followed by shipping fraud (21%) and third -party seller scams on legitimate online retail websites (16%).

Josh Gunnell, head of fraud and ID pre-sales at TransUnion in the UK, commented: “Our latest data aligns with industry statistics which confirm the extent to which fraudsters are taking advantage of the changes in consumer behaviour resulting from the pandemic. Businesses will need to examine their fraud prevention strategies to respond to the increase in online spending and to be able to deal with sudden shifts in attempts across different industries, in order to maintain consumer trust.”

Find out more about TransUnion’s fraud prevention and ID verification services here.

Notes:

ⁱ The percent or rate of suspected or risky fraudulent digital transaction attempts are based on those that TransUnion customers receiving TruValidate services have either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud.

“The latest quarterly figures from the Office for National Statistics confirm the extent to which fraudsters have taken advantage of the pandemic, showing a 24% increase for the year ending March 2021, when comparing pre-pandemic, with the year ending March 2019. Retail fraud and advanced fee fraud – which would include the delivery service scams that have been proliferating – unsurprisingly played a significant part in this. In fact, our recent Consumer Pulseⁱ study which has been tracking the impact of the pandemic showed that more than one in three consumers say they have been targeted in a digital fraud attempt related to COVID-19, rising to one in two for Gen Z. Phishing scams – reported by 39% of targeted consumers – remain the most common form.

“Similarly, Action Fraud reported a rise of 28% in fraud offences to March 2021 when compared with the previous year. This included a dramatic increase in online shopping and auction fraud – where people are being misled about buying or selling in an online marketplace – which was up 57%. Despite lockdown restrictions easing, the growth in online transactions is here to stay, and businesses must adapt to the changes and update their fraud prevention strategies where necessary.”

Notes:

Across industries, the rate of suspected digital fraud attempts globally rose 24% when comparing the first four months of 2021 with the last four months of 2020ⁱ.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, healthcare, insurance, retail and telecommunications, among others. The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™.

“Incidents of attempted fraud are on the rise internationally, with financial services seeing a particularly dramatic jump. Fraudsters have been quick to target a sector which has seen online transactions surge over the last year due to the pandemic,” said John Cannon, managing director of fraud and ID at TransUnion in the UK. “Financial services organisations are, however, implementing fraud prevention solutions with an encouraging degree of success and our recent survey of UK consumersⁱⁱ found more than one in 10 (12%) had been protected by their bank from losing money after falling victim to a scam, but this global research emphasises the huge scale of the task. As we continue to recover from the uncertainty seen over the last year, businesses must ensure they are continually reviewing and updating their fraud prevention strategies to help them deliver secure and seamless customer journeys.”

COVID-19 has accelerated the move towards digital financial transactions, with high street banks reporting a huge increase, which is unsurprising in light of repeated lockdowns and social distancing. This shift in behaviour has also led to growth for online-only banks and apps with nearly a third (32%) of consumersⁱⁱⁱ in the UK who have changed their current account since March 2020 opting for an online-only provider.

However, despite this growth in digital-first finance, concerns over security remain a major deterrent to consumers in the UK, with 35% of those who would not consider an online-only bank or app saying it was due to fears over digital fraud.

Examining Fraud Types and Their Impact on Industries

TransUnion analysed industries with the highest increases and declines in the percent of suspected digital fraud attempts against them, comparing the periods of 1 September to 31 December, 2020 and 1 January to 1 May, 2021.

Top Suspected Digital Fraud Rate Attempt Increases and Declines by Industry

TransUnion defines true identity theft, the top type of digital fraud in financial services, as the consumer using a stolen identity to commit fraud with the victim being a real person. The second and third most reported type of digital fraud by TransUnion financial services customers are first party application fraud and account takeover, respectively.

First-party application fraud is when a consumer refuses to repay legitimately incurred debts and/or falsely claims to be a victim of identity fraud to evade debt. Account takeover is when someone other than the owner of an account uses the account without permission, indicating that the account has been maliciously compromised.

Sam Welch, director of banking at TransUnion in the UK, said: “What we’re seeing demonstrated on an international scale is the agility used by fraudsters to target industries which are registering a boom in transactional activity. For finance providers in the UK, it’s critical to keep up with the ever-evolving tactics used by fraudsters to obtain and misuse customer and company information. An adaptable fraud prevention strategy with a multi-layered approach is crucial to managing these threats, which show no signs of abating in the near future.”

More information about TransUnion’s fraud solutions can be found here.

Notes

ⁱ The percent or rate of suspected or risky fraudulent digital transaction attempts are those that TransUnion’s customers either denied or reviewed due to fraudulent indicators compared to all transactions it assessed for fraud

ⁱⁱ Based on a survey of 2,000 UK consumers carried out on behalf of TransUnion in May 2021 

ⁱⁱⁱ Based on research conducted 5 – 9 March 2021 with 1,100 UK consumers on behalf of TransUnion

Fraudsters are increasingly impersonating well-known and trusted organisations, with the most common scams currently being fake delivery service texts, supposedly from Royal Mail or other providers requesting payment of false charges (56%), and texts claiming to be from organisations such as HMRC demanding outstanding fees (55%). WiFi scams are also common (36%) with the supposed broadband providers threatening to disconnect if the bogus fine isn’t paid.

At the same time, the means of responding has never been faster, with one in five (20%) consumers now responding to digital messages (emails, texts and social media adverts) within two minutesⁱ – potentially not recognising digital fraud attempts. Gen Z adults are the quickest responders, which might explain why they are the most targetedⁱⁱ, according to TransUnion’s Consumer Pulse tracking the financial impact of the COVID-19 pandemic.

Of those who fell victim to a scam attempt, they collectively lost £8.5 billion – or £1,149 on averageⁱⁱⁱ – more than doubling from £551 a year ago^iv. Whilst the number falling victim to fraud has only marginally increased (from 12% in May 2020 to 14% in May 2021) the sheer scale of attempts and the variety of scams is leaving people vulnerable.

Social media adverts selling hoax products have conned the most people (6%), whilst one in 20 have either paid false charity donations, fallen foul to one of the common text scams, given personal details to what they believed was their bank, paid for a pet on a bogus website, or been tricked by a fake holiday company offering a rebooking or refund.

“Scammers prey on consumers in times of vulnerability – such as the COVID-19 pandemic – and this coupled with an increasing reliance on tech has enabled fraudsters to flourish. Our research has shown that one in seven UK consumers (14%) have fallen victim, perhaps because they’re acting too hastily, often triggered by panic,” explains John Cannon, managing director of fraud and ID at TransUnion in the UK.

On a more positive note, people are becoming more aware of scams and what to look out for. Four in five (79%) say they are more vigilant in general and the same amount carefully study language used in texts or emails to decipher if they are authentic, whilst seven in 10 (70%) are suspicious of all correspondence from any business or brand.

Kelli Fielding, TransUnion’s managing director of consumer interactive in the UK adds: “It’s great to see consumers are getting more scam-savvy but given the volume of fraud attempts happening at the moment, it’s essential to remain vigilant. What we’re seeing is that whilst the rate of consumers falling victim hasn’t changed significantly, the scams have become more sophisticated and the losses much greater and that’s worrying, particularly at a time when many are still dealing with financial uncertainty resulting from the pandemic.

“However, it’s really positive to note that our survey found more than one in 10 consumers (12%) had been protected by their bank or finance provider, which stopped them losing money after falling for a scam. Consumers need to play their part alongside the banks by knowing what to look out for.”

TransUnion’s tips to help reduce the risk of fraud:

• Don’t be rushed. Follow the advice from Action Fraud and ‘Take Five’ to check something out if you’re worried, and use your common sense. Criminals are more likely to try and rush you than those with legitimate requests
• Avoid clicking links or downloading attachments from unexpected emails or messages from a brand or business unless you’re sure you know the origin, as these could release malware onto your device or steal your bank details. It’s okay to ignore emails or messages that are unsolicited
• If you receive a suspicious phone call from a supposed WiFi provider asking for payment and threatening to disconnect you, hang up and ring your broadband provider back on an official helpline number
• Be wary of messages or emails offering a rebate or refund and asking for your bank details. Do not follow the links but if you think it may be genuine call the company directly on their official number and ask for information
• When online, make sure the webpage you are visiting is HTTPS protected or shows a padlock – both of which can be spotted in the domain bar. This indicates that it’s secure
• If you are contacted by someone offering COVID-19 vaccines for money, remember that this vaccination is only available through the NHS, and they will not ask you to pay for it. You should alert the police and Action Fraud in this situation
• When downloading apps make sure you download them through the Apple App Store or Play Store app and take care to ensure you are downloading the official version. Downloading an app from e-mail could be a phishing attempt
• Make sure your security settings are up-to-date on your devices but if you’re working from home, be wary of emails seemingly from your company’s IT department asking you to download an update. You should confirm with them directly using a different telephone number to the one in the email

Regularly check your credit report to help understand and protect your financial standing. This can also help you monitor for fraudulent activity if someone tries to use your identity in a scam. You can check your TransUnion credit report and score for free with Credit Karma, Credit Monitor from MoneySuperMarket, or TotallyMoney.

Notes:

ⁱ On average 28% of UK consumers respond to texts within two minutes, 19% to emails within two minutes, and 14% act on a social media advert within two minutes. The weighted average of these is 20%

ⁱⁱGen Z adults, born 1995 to 2002, are the most targeted by fraudsters out of any in the UK, at 51%. This is according to TransUnion’s Consumer Pulse research (formerly the Financial Hardship Study), based on research conducted 5 – 9 March with 1,100 UK consumers on behalf of TransUnion

ⁱⁱⁱ 14% of UK consumers have fallen victim to a scam, at an average of £1149. According to latest ONS figures, the current UK adult population is 52,673,433, which means 7,374,281 consumers have collectively accumulated a loss of £8,473,048,869

^iv Research carried out by TransUnion in May 2020, spanning 2000 consumers nationwide revealed that 12.43% of UK consumers (18+) reported falling prey to fraud during the COVID-19 pandemic and losing an average of £551.40

“Today’s ONS fraud statistics reinforce the extent to which cybercriminals have been using the digitalisation of society brought about by the pandemic to their advantage.

“UK Finance has reported a 68% increase in remote banking fraud, whilst new data from Action Fraud confirms that incidents of online shopping and auction fraud have increased by 38%. This comes in the same week that the National Cyber Security Centre (NCSC) revealed they had taken down more scams in the last year than in the previous three years combined.ⁱ

“We particularly urge businesses and consumers to watch out for phishing attempts. This illegal means of collecting private data by posing as legitimate businesses such as banks, utility companies or even apps like Zoom is becoming increasingly sophisticated. Phishing now accounts for 48% of all fraud attempts, according to TransUnion’s own Consumer Pulse study.ⁱⁱ

“Also of concern is how criminals are hijacking the increase in vaccine-related communications to fraudulently harvest vast amounts of personal data. The NCSC announced this week that they had removed 43 fake NHS COVID-19 apps from unofficial app stores, underlining just how alert consumers will need to remain as we emerge from the worst of the pandemic.ⁱⁱⁱ Hyper-vigilance will be required from businesses too, and for many it will be well worth investigating tech solutions that can help mitigate this growing risk.”

Notes:

ⁱ National Cyber Security Centre - Active Cyber Defence report 2021

ⁱⁱ TransUnion’s Consumer Pulse study (formerly the Financial Hardship Study) commenced in March 2020. Based on data collected 5 - 9 March 2021 from 1,100 UK consumers on behalf of TransUnion

ⁱⁱⁱ National Cyber Security Centre - Active Cyber Defence report 2021

Gen Z adults, born 1995 to 2002, are the most targeted by fraudsters out of any in the UK, at 51%. They also appear to be more likely than other generations to have fallen victim, with 19% of the identified scams being successful. They are followed by Millennials, with 37% having been targeted in a digital fraud attempt and 16% of those becoming victims.

Among consumers in the UK targeted with digital fraud related to COVID-19, the most common scam is phishing, accounting for just under half (48%) of fraud attempts.

“The COVID-19 pandemic has been yet another example of fraudsters looking to take advantage of a significant world event and use it to scam UK consumers. The almost overnight transition online brought about by stay-at-home orders catapulted the country’s digital acceleration like we’ve never seen before,” said John Cannon, managing director, fraud and ID at TransUnion in the UK. “As we see digital fraud impacting a substantial portion of the population, it’s important to keep in mind the significant progress made in protecting businesses and consumers from attempts like this. In fact, UK Finance notes that while fraud volumes have increased in the last year, overall financial losses saw a decrease of 5%ⁱⁱⁱ compared to 2019.”

Gaming industry fraud

The online gaming industry is a prime example of an industry facing rising numbers of transactions as in-person options for participation were closed off and overall participation from consumers rose through the year. Unfortunately, this was accompanied by rising fraud rates. Through its TruValidate solution, TransUnion documented 19% growth in transactions among its global iGaming customers from 2019 to 2020, likely due to an increase in activity on customer platforms, and recently researched its fraud impact in a special report^iv.

Globally, it determined that its online gambling customers experienced a 9% increase in the rate of suspected fraud among the 576 million iGaming transactions TransUnion analysed for risk indicators last year.

This growth aligns with industry figures which registered a significant increase in UK consumers gambling online last year. In the year to December 2020, nearly a quarter (24%) of UK adults had gambled online in the previous four weeks, up from 21% in 2019^v.

Adam Hancox, head of gaming for TransUnion in the UK and Europe said: “As more people turn to online platforms for gaming, either as a natural evolution of their engagement with the industry or as a result of COVID-19 limiting the chances for betting in person, it’s absolutely crucial that providers are operating a protective, secure environment. Recognising an increase in fraud attempts in gaming, as well as the high rate of consumers reporting digital fraud attempts, operators need to ensure they are keeping pace with the latest technology and fraud prevention solutions.”

As iGaming on mobile devices is still much higher than desktops, with the percentage of online gambling transactions coming from mobile devices at 69%^vi, this will be a priority area of focus for gaming operators in the coming months.

Discover more about TransUnion’s fraud and ID solutions here.

Notes:

i TransUnion’s Consumer Pulse research (formerly the Financial Hardship Study), based on research conducted 5 – 9 March with 1,100 UK consumers on behalf of TransUnion

ii Based on a survey of 1007 UK consumers, from 13-14 April 2020, carried out on behalf of TransUnion

iii FRAUD - THE FACTS 2021, UK Finance

iv TruValidate Global iGaming Fraud Trends

v UK Gambling Commission: Gambling behaviour in 2020: Findings from the quarterly telephone survey

vi TruValidate Global iGaming Fraud Trends

“The ONS retail sales figuresⁱ for January 2021 show a drop of 8.2% when compared with December 2020. This won’t come as a surprise, given the impact of COVID-19 and the ongoing national lockdown that continues to affect sales. Only two sectors bucked the trend in January and saw monthly growth. Non-store retail – largely made up of online-only brands – was up 3.7%, whilst food stores increased by 1.4% compared with the month before.

“The growth in online retailing has been a consistent theme throughout the pandemic and highlights the major shift that has taken place within the sector. The ONS figures show that online shopping as a proportion of spend reached 35.2%, a steep rise on the previous year which stood at 19.5%, and all store types reported an increase in their proportion of online spending in January compared with the previous month.

“That shift was happening anyway, but COVID-19 has rapidly accelerated it. According to Gartnerⁱⁱ, the increase in online retail sales penetration in the UK in the three months between February and May 2020 is the same as what was achieved in the past 10 years. We’ve seen the dramatic impact of this in recent weeks, with news that online retailer Boohoo has acquired the Debenhams brand, leaving behind its historic department stores, whilst ASOS has bought the Topshop and Miss Selfridge brands, once high street meccas for young shoppers. As the face of the high street changes irrevocably, retailers need to adapt quickly in order to thrive in a competitive, digital environment.

“The rise of ecommerce brings into sharp focus the need for seamless customer experiences alongside robust fraud prevention methods. Delivering customer journeys that are smooth, safe and personalised is essential. Retailers need to be keeping up with the latest innovations to live up to the expectations of digital-savvy shoppers, whilst also implementing appropriate fraud prevention tools to stay ahead of the fraudsters that thrive in this faceless, digital environment. Our own researchⁱⁱⁱ tracking the impact of the pandemic has shown that nearly a third of UK consumers have been targeted in a digital fraud attempt.

“The impact of COVID-19 will be long-lasting for the retail sector but the shifts we’ve seen will also create huge opportunities for forward-thinking brands to make their mark in a radically changed retail landscape.”

Notes

i ONS, Retail Sales, Great Britain, January 2021

ii Gartner Predicts 2021, COVID-19 Drives Accelerated Shift to Digital and Commerce Model Evolution

iii TransUnion’s Financial Hardship Study, based on a survey of 1,086 adults in the UK conducted 30 November 2020 on behalf of TransUnion

“The latest ONS fraud statistics reveal the sheer scale of the challenge we face in the UK as cybercriminals take advantage of the digitalisation of society. UK Finance has reported a 61% increase in remote banking fraud, which equates to 61,752 incidents, whilst Action Fraud reveals social media and email hacking fraud jumped 53% to 14,241 offences in the year ending September 2020.

“These increases in digital fraud are likely to continue, given the shifts to online that have been accelerated by the pandemic alongside the social distancing and lockdown measures that continue to be imposed. This is echoed by TransUnion’s own research tracking the impact of COVID-19 in the UK, which showed that at the end of 2020, 30% of respondents had been targeted in a digital fraud attempt related to the pandemic, with 7% of those falling victim to the scams^[i].

“Fraudsters adapt quickly – as we’ve seen recently with the rise in investment scams circulating on Instagram and other social media channels – and businesses need to be equally agile, continually reviewing and adapting their fraud prevention strategies and tools.

“Even some of the strategies to prevent fraud can themselves become vectors of fraud, such as the ‘confirmation of payee’ scheme. This is in place to better protect consumers but has given rise to a spike in phishing texts telling the target that a new payee has been set up and directing them to click a link for details. The threats evolve continually and in the current environment, with people banking and shopping almost exclusively online, these risks are greater than ever.

“The ONS figures would suggest fairly similar levels of overall fraud as the previous year, at 4.4 million fraud offences for the 12 months to September 2020. However, we see a varied picture from the different bodies within the National Fraud Intelligence Bureau for the same period. Action Fraud reported a 4% rise, UK Finance reported a 23% increase and Cifas, reported a 9% decrease. As well as the nuances of the different reporting methods, we must also take into account that fraud is often going unreported. Our own research^[ii] into this last year showed that 75% of COVID-19 related fraud had not been reported.

“We’d expect to see continuing fluctuations in the different types of fraud as we navigate our way through the pandemic, and vigilance is key. As well as having all the essential checks in place, businesses can educate consumers to help them spot some of the signs and notify their customers when known scams are circulating.”

Notes

^_[i] Based on data collected 20 November 2020 for TransUnion’s Financial Hardship Study, a series of surveys of 1000 UK consumers, carried out on behalf of TransUnion

^[ii] Based on a survey of 2000 UK consumers, conducted in May 2020 on behalf of TransUnion

The number of households reporting a negative financial impact also shows slight improvement from a month ago but stands at 50%, highlighting the split between those hard hit and those who have been able to weather the pandemic, in some cases with little financial impact.

For those that are struggling, mostly due to reduced working hours or job losses, the ability to pay bills remains a significant worry, with nearly two thirds (65%) expressing concern. Credit card bills are the most commonly cited (39%), closely followed by utilities (38%) and rent payments (29%). The average expected shortfall is £585.

Yet, at the other end of the spectrum, almost a quarter of UK households (24%) report that they are now financially better off than anticipated at the beginning of 2020, whilst a further 37% are finishing the year in the financial position they had anticipated.

Satrajit “Satty” Saha, CEO of TransUnion in the UK said: “Our Financial Hardship Study has tracked the impact of the pandemic on consumer finances since March and as we come to the end of 2020 the figures indicate a mixed picture. Those who expect to be unable to pay their bills envisage this happening in the next six to seven weeks, at the end of January, so businesses should be preparing for this and tailoring plans to help customers that are in difficulty. I’m heartened to see that the number of companies reaching out to explain payment options has almost doubled since our study began in March, now 41% versus 22%^[i] .

“However, six out of 10 (61%) households are where they expected to be, or better off in many cases, with the radical lifestyle changes we’ve faced this year bringing cost savings on thigs like petrol, holidays, sports and socialising. This divide may be something that widens further in the months ahead, when government support schemes come to end.

“One thing that can affect everyone however, whether financially impacted or not, is fraud and our latest research shows that three out of 10 UK consumers have been targeted in a digital fraud attempt related to COVID-19, up from 22% in March. Consumers need to take extra precautions, particularly as we approach the holidays, with online shopping and delivery services ripe targets for fraudsters, whilst businesses need to be doing all they can to both educate and protect their customers.”

Brendan le Grange, director of research at TransUnion in the UK adds: “The rate of fraud attempts is highest among Gen Z (42%) and Millennials (36%) with current levels overall back at the highest we've seen. Phishing remains by far the most common type of fraud at 38%, followed by shipping fraud – one to be wary of this time of year, at 17%. The younger generations have been the hardest hit by the pandemic, in many ways. Gen Z feel the greatest financial impact, at six out of 10 (61%) and we see this impact steadily decline as the generations age. Yet, despite this, it’s the younger consumers that are showing the most optimism in terms of the future. More than half of Gen Z (57%) and 46% of Millennials are at least somewhat optimistic, compared to just 37% of Gen X and a third (34%) of Baby Boomers.

“Whilst there are still challenges ahead, with Christmas spending possibly heightening financial worries for some, our study shows that almost a third (32%) of impacted consumers still plan on using savings to help pay their bills and loans. Although there are longer-term implications regarding the savings that consumers have dipped into this year, it’s positive to see that these are still providing a cushion for many. A similar number (31%) are planning to negotiate partial payments with their lenders and nearly half (47%) of impacted customers have already reached out to their finance provider to discuss this.”

Read the latest Financial Hardship Study report from TransUnion here.

Notes

Unless otherwise stated, figures refer to the latest report in TransUnion’s Financial Hardship Study, based on a survey of 1,086 adults in the UK conducted 30 November 2020 on behalf of TransUnion.

[i] Based on a survey of 1,095 adults in the UK conducted on 24 March 2020 on behalf of TransUnion

“The latest statistics from the National Fraud Intelligence Bureau (NFIB) show a 4% increase in overall fraud for the year ending June 2020, when compared to the previous year. This is based on reported fraud offences provided by Action Fraud, Cifas and UK Finance. However, there are significant differences within these groups, related to the coverage and fraud types they capture.

“Notably, UK Finance reported a much more significant increase in fraud, up 44% on the previous year. In particular “remote banking” fraud has more than doubled, with a 58% rise and 55,058 incidents in the 12-month period. This highlights that fraudsters are continuing to take advantage of the greater numbers now regularly using internet, telephone and mobile banking, which has seen further acceleration as a result of COVID-19.

“Our own data bears this out and confirms that the trend is continuing. The latest figures from TransUnion’s ongoing research tracking the impact of the pandemic on UK consumers show that almost a third (30%) have been targeted in a digital fraud attempt related to COVID-19ⁱ, up from 22% when our study began in March and the highest level seen to date.

“In this ongoing fight against fraud, it’s essential that businesses have an armoury that combines traditional measures with the latest technological advances. Biometrics and digital identity concepts are likely to become increasingly important, as our latest studyⁱⁱ has shown, with tools such as facial recognition, enhanced ID verification and digital data risk assessment helping businesses to keep themselves and their customers safe online.”

Notes

[i] TransUnion’s Financial Hardship Study incorporates a regular survey of around 1,000 UK consumers. Data is based on a survey of 1,094 adults conducted 5-6 October 2020

[ii] "New Dimensions of Change: Building Trust in a Digital Consumer Landscape,” is based on a study carried out by the Economist Intelligence Unit for TransUnion with 1,610 executives across 12 countries and five continents, including 180 senior executives from the UK

“The latest ONS retail sales figures reveal the continuing resurgence in the industry, with a monthly increase in overall sales volumes of 0.8%. This marks the fourth consecutive month of growth, and a rise in sales volumes of 4% when compared with pre-pandemic levels in February. Home improvements have helped fuel this growth, with household goods sales up 9.9% when compared with February, as people have been forced to spend more time at home. This trend is likely to continue, given the ongoing uncertainty around possible further lockdowns.

“Online retail sales were down 2.5% compared with July, but thanks to the significant growth throughout the pandemic, this remains 46.8% higher than in February. That huge shift has brought with it increased fraud risks for retailers, as fraudsters seek to exploit rapidly changing shopping habits. Recent research from TransUnion’s Financial Hardship Study*  confirms this, showing that more than a quarter of UK consumers (26%) have been targeted in a digital fraud attempt related to COVID-19. Phishing remains the most common method experienced (41%), followed by third-party seller scams on legitimate retail websites (18%). This is where fraudsters masquerade as genuine private sellers in online marketplaces, often with counterfeit or faulty goods, or even no goods at all. Both businesses and consumers need to be vigilant here and retailers should be putting in place robust tools to mitigate risk and protect their customers, as well as educating shoppers on the warning signs to look out for.”

Notes

*Based on a survey of 1,063 UK adults conducted 30-31 August on behalf of TransUnion

TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions for more than 40,000 websites and apps contained in its fraud prevention solutions. It found the percentage of suspected fraudulent digital transactions against businesses worldwide decreased 9% from the beginning of the pandemic (“phase one,” 11 March to 18 May) to when businesses began reopening (“phase two,” 19 May to 25 July).

In contrast, TransUnion’s Consumer Financial Hardship Study found that globally, consumers targeted by digital COVID-19 fraud schemes increased 10% from early in the pandemic (week of 13 April) to more recently (week of 27 July).

In the UK, TransUnion’s findings aligned with the global analysis. Suspected risky transactions as a percentage of all transactions originating from the UK against businesses decreased by 22% when comparing pre-pandemic (1 January to 10 March) to phase two, after an initial increase of 12% when comparing phase one to pre-pandemic. Yet the latest data from TransUnion’s study of UK households at the end of July shows that consumers have seen an increase in digital fraud attempts related to COVID-19, with one in four^[i] people having been targeted since March.

John Cannon, managing director of fraud & ID at TransUnion in the UK said, “Over recent months, businesses have seen increased adoption and utilisation of digital channels and that can present attractive opportunities for fraudsters. It’s encouraging to see that we are proportionally stopping more suspected fraud attempts against businesses, thanks to robust controls. However, this will likely result in fraudsters moving to other targets. In particular, consumers are facing increasing fraud threats as our Financial Hardship Study confirms, with COVID-19 related digital fraud attempts in the UK increasing from 22%^[ii] to 27%^[iii] between March and July. To tackle this, senior business leaders should continuously review if current controls are adequate for the changing digital fraud landscape.”

Industries Targeted by Transactions Coming from the UK

TransUnion analysed how different industries had been impacted by looking for a change in the percent of suspected online fraud against them originating from the UK. It compared the periods of 1 January to 10 March (pre-COVID-19), 11 March to 18 May (phase one) and 19 May to 25 July (phase two).

Financial services saw a decrease of 60% when comparing suspected digital fraud pre-COVID-19 to phase two, whereas retail saw the biggest increase of 44% at the end of phase two, when compared to pre-pandemic. Telecoms also saw a significant increase in suspected fraud of 24% when comparing the same periods, followed by the insurance sector at 8%.

Travel and leisure initially saw a significant decline in suspected online fraud during phase one, but that changed in phase two, although overall there was still a 12% decrease when comparing phase two with pre-pandemic figures. Gambling saw a similar decrease of 10% in risky transactions when looking at the same timeframe.

John Cannon continued: “While suspected fraud attempts might be declining across the board for businesses, certain industries are still facing a significant threat. Like many criminals, fraudsters can be opportunistic, following the industries that are most in demand as the pandemic develops. Retail and telecommunications are both examples of this, as our figures demonstrate. Similarly, the decline in suspected fraud within travel and leisure coincided with the first phase of UK lockdown, but as restrictions have eased, scammers have stepped up fraudulent activity in this sector. It’s essential that businesses have the right prevention tools in place to help protect consumers, as well as educating them on how to spot the warning signs.”

The Cost to Consumers

An additional UK survey^[iv] on COVID-19 scams showed that by the end of phase one, fraud related to the pandemic had cost UK consumers £3.6 billion and the ongoing study would suggest that figure will have continued to rise.

This research, which covered both online and offline fraud, found that one in 10 UK consumers (12%) had fallen victim to a scam in phase one, at an average cost of £550. The two most common methods of targeting consumers were via email and over the phone (both 29%), but a surprising number of scams were carried out in person (12%).

The nationwide survey suggested that those aged 18 to 34 and living in major cities are most likely to fall victim, accounting for two thirds (66%) of those believing a COVID-19 related scam and losing money as a result, and that men are almost twice as likely to be conned with a COVID-19 scam than women (62% male versus 37% female).

For more information on TransUnion’s fraud and identity verification solutions visit TransUnion.co.uk.

Notes

[i] TransUnion’s Financial Hardship Study, incorporating a regular survey of 1000 UK consumers. Based on average from 23 March to 3 August 2020

[ii] TransUnion’s consumer research survey of 1,095 of UK adults conducted 23-24 March 2020

[iii] TransUnion’s consumer research survey of 1,100 UK adults, conducted 1-3 August 2020

[iv] Survey of 2,000 UK adults conducted on behalf of TransUnion between 12-14 May 2020

The established gaming operator, best known for its Mecca Bingo and Grosvenor Casino brands, along with the recently-acquired Stride Gaming, will adopt TransUnion’s Affordability Solution for Gaming  in the UK – a suite of tools designed to help protect players from gambling-related harm and help inform fair and responsible decisions. The solution uses individual-level financial data and industry-recognised scores, built for the gaming sector by TransUnion, along with sociodemographic and property data.

In addition, Rank will use TransUnion’s device intelligence fraud prevention solutions across all its gaming brands. By analysing relationships between devices and accounts, as well as leveraging device history and confirmed fraud reports from TransUnion’s global network of fraud and security analysts, online and mobile fraud can be stopped in real time, without compromising customer experience.

Speaking of the new partnership, Adam Hancox, head of gaming at TransUnion in the UK and Europe commented: “We’re really excited to be working with Rank – which operates all of Rank Group’s online casino and bingo brands – to support them in their continued drive to ensure player safety and fraud prevention. Our Affordability Solution for Gaming can help Rank to identify the potential financial stress and vulnerability of players at any point in the customer journey, using our cutting-edge modelling and analytics, whilst our device risk fraud prevention tools can help Rank keep fraudsters out, while confidently onboarding new customers.”

Rory Howard, Rank Group’s director of payments and customer diligence, said: “As a leading player within the gaming industry, we aim to consistently exceed the expectations of our customers, and to do that we need innovative tools that can protect our players whilst offering a smooth customer experience. Supporting responsible gaming is a priority for us and TransUnion’s affordability solution will provide us with detailed insights to inform our decision-making.

“In addition, TransUnion’s device intelligence tools can help us keep our customers, and our business, safe by helping us to spot transaction and device patterns that indicate fraud, and to accurately recognise a device while minimising false positives. These tools also provide insight into high-risk activity such as mismatches of specific time zones, regions and IP addresses, ensuring a multi-layered approach to maximise protection.”

Understanding the legitimacy of the identity, email and telephone number the player is presenting helps avoid duplicate records in an operator’s player database and can support player safety – if a player wants to self-exclude for example – as well as minimising bonus abuse.

Find out more about TransUnion’s Affordability Solution for Gaming here and its fraud detection and ID verification services here.  

“Today’s figures from the Crime Survey for England and Wales (CSEW) have revealed the total number of estimated fraud incidents at 3.7 million for the year ending March 2020, which remains consistent with the previous year. Statistics from the National Fraud Intelligence Bureau (NFIB) however, which includes data from Action Fraud, Cifas and UK Finance, showed a 12% increase in the total number of fraud and computer misuse offences for the same period.

“Regardless of these anomalies in reporting, neither will reflect the impact of COVID-19 which has led to a surge in scams as fraudsters exploit people at their most vulnerable. The NFIB data from Action Fraud shows an increase in online shopping fraud of 23% and that’s something which we’ll likely see reflected further in the next set of figures, in light of the lockdown period.

“According to TransUnion’s latest research, three in 10 (30%) UK households have been targeted in a digital fraud attempt related to COVID-19, up from 22% when our study began in March. Our research also found that by May, COVID-19 scams had cost the UK £3.6 billion, with the two most common methods being via email and over the phone (both 29%). This aligns with NFIB data which shows consumer phone fraud was up 31% on the previous year.

“One example of the evolution in COVID-19 fraud is the bounce back loan, where fraudsters apply for an emergency cash-flow loan in the name of the organisation they’re aiming to defraud – then attempt to use the incoming money in payment for goods the trader would supply. Enforced shop closures and social distancing have meant that businesses such as car dealerships have had to move their normally in-person service entirely online, with faceless interactions for transactions of significant value making them easy targets for these kinds of tactics.

“The prevalence of fraud in the current environment means everyone is at risk. From investment fraud, or ‘Ponzi schemes’ which have seen a staggering 78% annual increase according to Action Fraud, to high profile hacking as seen this week with Twitter accounts including former US president, Barack Obama, Tesla founder and CEO, Elon Musk and celebrities such as Kanye West all hit by a bitcoin scam. Maintaining vigilance and appropriate levels of cyber-security is essential and both businesses and consumers have a role to play.

“For businesses, identifying attempted fraudulent activity early is critical in minimising the financial losses. As the fraudsters evolve their techniques and scams, the tools and technology to prevent them are evolving in equal measure and businesses need to create a multi-layered defence to protect themselves and their customers as we move forward through this ongoing pandemic.”

TransUnion is providing consumer-friendly identity-checking and age-verification services to Kwiff through its CallValidate solution, helping the operator to maintain a seamless customer experience whilst minimising the risk of fraud and supporting responsible gaming.

The announcement comes as Kwiff prepares for international expansion into new markets in the second half of 2020. TransUnion’s global capabilities will be on hand to support Kwiff’s dynamic plans, with its identity solutions available in more than 135 countries worldwide.

Mike Goode, chief financial officer at Kwiff commented: “Our partnership with TransUnion enhances our commitment to placing our customers at the very heart of our business, and protecting their interests whilst providing them with personalised customer service. As an innovator in our field we seek out the most comprehensive and cutting-edge solutions to meet our business needs and we regard this as an important milestone in our journey as we prepare to replicate the success we’ve seen in the UK in other global markets.”

Adam Hancox, head of gaming for TransUnion in the UK and Europe said: “To support responsible gaming, it’s essential that the operator knows who their customers are and takes all possible steps to prevent fraud. We’re delighted to be supporting Kwiff with our fraud and identity verification solution which helps to safeguard players whilst maintaining operational efficiencies, delivering a smooth customer journey and following anti-money laundering regulation.”

TransUnion’s CallValidate solution is used by leading operators in online gaming and many other business sectors and can be configured to suit the individual business’ needs. It captures and validates customer identity, and risk assesses digital identity attributes such as email and device, whilst simultaneously checking payment card or bank account details to link them to their real owner.

With proven results across both the private and public sector, CallValidate helps to prevent fraud and can reduce operational costs, whilst streamlining the customer experience and lowering abandon rates. Visit TransUnion’s website to find out more about its fraud and verification services.

This is according to new research from TransUnion, one of the UK’s leading credit reference agencies, which also provides services to businesses to help prevent fraud. In its study tracking the impact of the pandemic, TransUnion found that nearly a quarter of UK consumers (23%) have been targeted by digital fraud over the past two months**.

When expanding that to consider other types of fraud, one in 10 have succumbed to an attempt. The two most common methods are via email and over the phone (both 29%), but the research showed a surprising number of scams were carried out in person (12%).

The types of scams UK consumers have been most affected by are also revealed. These include donating money for personal protective equipment, known as PPE, (18%) or to companies claiming to offer a cure for the virus (16%), as well as buying goods in short supply – such as toilet roll or hand sanitiser – that never turned up (16%).

Across the nation, those aged 18 to 34 and living in major cities are most likely to fall victim, accounting for two thirds (66%) of those believing a COVID-19 related scam and losing money as a result. Men are almost twice as likely to be conned with a COVID-19 scam than women (62% male versus 37% female).

“Unfortunately, it’s common for scammers to exploit our fears during times of turmoil, such as a global pandemic. People can find it particularly difficult to spot fraud in a changing environment where we’re facing new and different situations,” explains John Cannon, managing director of fraud and ID at TransUnion in the UK. “We’re all dealing with a lot of change and it’s a particularly cruel type of fraudster who attempts to use it to their advantage. It’s essential that people take extra care at this time and remain vigilant to fraudsters and some of their common tactics, such as phishing emails, fake websites and bogus texts. At a time when so much community spirit is evident, we must still be cautious of direct approaches from people we don’t know with an offer of help.”

Despite the extent of COVID-19 related fraud, 75% of cases are going unreported according to the findings. TransUnion is urging people to be scam-savvy and make the most of guidance available, such as the government-backed TakeFive scheme, as well as reporting the criminals by contacting Action Fraud – the national reporting centre.

Kelli Fielding, TransUnion’s managing director of consumer interactive in the UK adds: “Given the financial hardship that many are already facing, with three in five UK households negatively impacted, and many of those worrying about paying bills, people simply can’t afford to lose out to the fraudsters. The average amount being lost in scams is almost the same as the typical shortage for bills, at £556**, so it’s easy to see the huge impact that fraud could have on a household; suddenly doubling that shortfall and making it really difficult to manage. People need to be super cautious about this to protect themselves.”

TransUnion’s tips to help reduce the risk of fraud:

• Avoid clicking links in emails or messages unless you’re sure you know the origin. It’s okay to ignore emails that are unsolicited
• Don’t be rushed, take time to check something out if you’re worried and use your common sense. If the claim seems too good to be true, it probably is. Don’t let your emotions cloud your judgement
• When online, make sure the webpage you are visiting is HTTPS protected or shows a green padlock – both of which can be spotted in the domain bar. This indicates that it’s secure
• Check the reliability of the source – for example, legitimate websites are likely to be typo-free, in good written English and informative
• Try to avoid connecting to public WiFi when shopping online, as it tends to be less secure than personal WiFi connections. Fraudsters can use public WiFi records to download traceable data, like location, device details and shopping habits
• When downloading apps make sure you download them through the Apple App Store or Play Store app. Downloading an app from e-mail could be a phishing attempt
• Don’t share any personal or financial information without checking first and be suspicious if you’re asked for your password or PIN
• Report scams immediately to Action Fraud and contact your bank if you’ve lost money
• Regularly check your credit report to help understand and protect your financial standing through the pandemic. This can also help you monitor for fraudulent activity if someone tries to use your identity in a scam. You can check your TransUnion credit report and score for free with Credit Karma, Credit Monitor from MoneySuperMarket, or TotallyMoney.

Notes

Unless otherwise stated UK research was conducted in May 2020, among a nationally representative sample of 2,000 UK adults (18+).

*12.43% of UK adults reported falling prey to fraud during the COVID-19 pandemic, meaning 6,545,955 have been scammed an average of £551.40, based on current population. Collectively, this would be a net sum of £3,609,439,587 or £3.6 billion.

**TransUnion’s Financial Hardship Study, commencing 23 March and incorporating a weekly survey of 1000 UK consumers: based on average taken from 23 March to 13 May 2020

“Whilst the nuances of reporting can make it difficult to get a clear picture, given that these statistics pre-date COVID-19, we’re likely to see an increase in overall fraud in future figures, alongside the current pandemic. Our own research* has shown that nearly a quarter (24%) of UK consumers believe they have been targeted in a digital fraud attempt, related to COVID-19, with one in four of those succumbing to the scams.

“The operational challenges created by social distancing have made the task of fighting fraud that much harder for businesses with depleted resources, whilst opportunistic fraudsters have preyed on the generosity, and vulnerability, of those in isolation with a host of targeted scams – ranging from fake COVID-19 cures and medicines to fraudulent loans and insurance.

New ways of working can bring new threats

“Given the unprecedented situation, many organisations were unprepared for the sudden transition to remote working, with millions of employees currently working from home under lockdown measures; a change that can bring with it the risk of susceptibility to fraud and increased cybersecurity incidents. Greater reliance on video conferencing and social media to maintain contact with both colleagues and customers can potentially give hackers an opportunity to exploit the security and privacy of these platforms.

“Businesses need to adapt fast to protect both themselves and their customers. They can do this by raising awareness of what to look out for and empowering customers with educational resources and tools for monitoring their account and credit information for fraudulent activity. Organisations should also be reviewing their monitoring strategies to identify potential threats in light of the change in behaviours and adjust as needed, so that appropriate triggers are in place if suspicious activity occurs. Putting the right tools into practice will help businesses minimise the risks and maintain trust with consumers during this challenging period.“

*TransUnion’s consumer research survey of 1,007 UK adults, conducted on 15 April 2020

Today’s ONS retail sales data shows that February was a tough month for UK retailers even before the Covid-19 shutdown in March forced all non-essential stores to close. High street retailers were feeling the impact of continued bad weather, and when compared with February 2019, it reflected the lowest year-on-year growth rate for seven years, at negative 1.6%.

A few retailers said the impact of Covid-19 had affected sales of goods shipped from China – but the full impact of the outbreak will be shown in the March figures. The situation for non-essential retailers has been greatly exacerbated by social distancing and the current shutdown, with many high street stories seeing sales plunge. Some have closed their stores for the time being, with Apple, Selfridges and Ikea just a few of the big names that are limiting activity to online-only, as discretionary spend has plummeted.

Interestingly, today’s figures highlight that just before the outbreak, textile, clothing and footwear were up on the previous three months, whilst food stores were slightly down. This has all been turned around by Covid-19, with food and grocery stores a experiencing a huge boom in sales as consumers look to stock up on non-perishables, over-the-counter medicine and household essentials, whilst food delivery has exploded.

Average supermarket spend up 16%

Recent statistics showed that the average spend per trip in supermarkets is up 16% to £22.13*, with this largely being attributed to ‘accidental stockpilers’ – or the fact that people are buying a few extra items each shop, not necessarily buying lots of the same item.

Internet sales increased by 5% in February 2020, when compared with February 2019 –a trend we expect will be reflected heavily in the statistics for March. It’s likely that online shopping will see further increases in certain areas as the public observe the government’s instructions to stay at home. Toys, electrical goods, gaming and even furniture are all expected to benefit, along with delivery and logistics companies.

The government has offered various means of support as businesses adapt and adjust – including a ‘Coronavirus job retention scheme’, business interruption loans, deferred tax payments, and a 12-month business rates holiday for all retail, hospitality and leisure businesses in England. These will be a major support for retailers at this critical time. However, they also need to think about the longer-term and start adapting their models if appropriate.

Scams on the rise with a quarter of consumers targeted

For many in the e-commerce world, social distancing may have inadvertently boosted business but will also have exposed them to greater risk. Fraudsters are exploiting the sudden demand, with a surge in online scams, whilst businesses’ manual lines of defence are impacted by staff working from home. Our own research has shown that more than one in five (22.4%) UK consumers believe they have been targeted by fraudsters, with almost a quarter of those (5.3%) succumbing to the scams.

Businesses need to be doing all they can to protect themselves and their customers from fraud and there are tools available to help them do that without impeding the customer journey. Our guide to tackling fraud in e-commerce gives retailers some helpful tips.

*Kantar analysis of over 100,000 UK consumers

**TransUnion’s consumer research study of 1,095 adults conducted  23 – 24 March 2020

Online sales are expected to rise again this year, following a record increase last year to over 20% of all salesⁱ. With the average shopper expected to spend around £315 per personⁱⁱ, both online and in store, the shops are looking to beat last year’s whopping 1708% increase in sales on Black Fridayⁱⁱⁱ compared to an ordinary day, so there’s a huge incentive for fraudsters to get in on the action.

Kelli Fielding, managing director of consumer markets at TransUnion in the UK, which will provide hundreds of thousands of credit and identity checks over the peak shopping period as consumers shop online said: “Even without the rush of Black Friday or Cyber Monday, retailers are being increasingly targeted in fraud attacks. According to fraud prevention service Cifas, this year has seen online retailers hit with a 12% increase^iv in fraud overall. This included both identity fraud, where the fraudster uses the address of the victim, and also a huge 90% rise in cases where a criminal takes over a user’s account and makes purchases for delivery.

“Whilst retailers have checks in place to protect their customers wherever possible, it’s important consumers know the signs to look out for, so that they can spot some of the typical scams and keep themselves safe when shopping online.”

Kelli shares a few tips as the peak shopping period approaches:

Be sceptical. If you think it’s too good to be true, it probably is. Black Friday deals are designed to be eye-catching and competitive but if you think that 90% discount on the latest high-tech TV is a great bargain, check it carefully, or it may end up costing you much more than full price in the long run. Fraudsters often create fake sites to replicate real ones – a common scam tactic – so check the URL for unusual characters. If it’s a site you’ve never heard of before, check whether it runs over a secure connection by looking for a green padlock in the address bar or https:// before the web address, and check whether it shows up in a google search. If you spot misspellings or odd language, that may also be a sign it’s a fake. The government-backed Take Five fraud campaign helps consumers understand more about some of the common scam tactics so they can protect themselves from financial fraud. Visit https://takefive-stopfraud.org.uk

Make the right connections. With mobiles, tablets and laptops, it’s easy to connect to WiFi whenever and wherever is convenient to take advantage of the sales. However, as a rule of thumb, try not to shop using public or open WiFi. A fraudster can often download simple hacking software and snoop on how you’re using that public WiFi network – on a train or in a coffee shop, for example. If you really need to shop in these locations rather than wait until you get to your home WiFi, use mobile data, or connect through a VPN which will encrypt your data and prevent anyone else seeing it and stealing your details.

Go directly to the source. Some retailers will offer exclusive discounts if you download their app or sign up for marketing emails. Check that you’re downloading the real app directly; verified through the Play Store or Apple App Store and not through an email link. Anything emailed could be a smart phishing attempt.

Don’t be tempted to suspend or cancel security settings for an app either. If you’re keen to get the loyalty scheme discounts – sign up on the store website or official app directly where you can be sure you’re giving your information to the right people, not scammers who may have created a convincing fake email and landing page.

Keep it to yourself. It’s natural to want to tell everyone about the super deal you’ve just snagged. But before you share anything on social media, consider that scammers may be monitoring for information that can help them build a picture of potential targets for identity theft. That includes locations, financial details, shopping habits, travel plans and more, so think before you share anything.

Regularly checking your credit report can help you monitor for ID fraud, as if someone tries to use your identity in a scam, this might be one of the first places you spot it. To monitor your TransUnion credit report regularly, sign up to one of the following free online services: Credit Karma, MoneySuperMarket, or TotallyMoney.

Notes

[i] ONS retail bulletin November 2018

[ii] ONS, as above

[iii] Collected retail stats for UK Black Friday

[iv] UK Fraud report. Cifas Fraudscape 2019