20
July
2022
|
13:07
Europe/Amsterdam

Rate of Suspected Digital Fraud Attempts Coming from Namibia Decreases 7% Despite Scams Increasing Against Gambling and Financial Services Companies

TransUnion releases quarterly fraud analysis for billions of transactions assessed in Q1 2022

The rate of digital fraud originating from Namibia decreased in Q1 2022, with suspected online fraud attempts declining -7.0% from the same quarter last year, in line with the global decrease of -22.6% during that same time period. TransUnion’s (NYSE:TRU) quarterly digital fraud analysis observed that while the overall rate of suspected digital fraud declined in Namibia, there were significant shifts year-over-year (YoY) within certain industries.

Sectors such as telecommunications, travel and leisure, and retail saw YoY decreases in the suspected attempted digital fraud rate from Namibia. Conversely, fraudsters in Namibia increased their suspected scams in sectors such as gambling and financial services.

“What we observed in Namibia and globally is that sophisticated fraudsters are shifting their focus to target new industries as sectors previously targeted have ramped up fraud prevention measures. In other words, fraudsters are constantly seeking out new opportunities based on vulnerabilities,” said Amritha Reddy, Head of Fraud at TransUnion South Africa.

“What’s critical is that companies don’t become complacent with fraud prevention measures as fraudsters become ever more sophisticated. At the same time, companies should leverage this temporary shift in fraudulent activity to focus on optimising customer experience without compromising security.”

Rate of Digital Fraud Attempts Decrease in Namibia, but Some Industries See Growth

The telecommunications industry saw the largest YoY decrease in the suspected fraud attempt rate for digital transactions coming from Namibia, at -39.1%. When digital fraud in telecommunications did occur, TransUnion found the most dominant type in that industry globally was  identity theft. This occurs where a customer uses a stolen identity to commit fraud, and the victim who is the identity owner is a real person.

Fraudsters have cycled through certain industries during the pandemic and are now rotating to other vulnerable sectors. This makes these vulnerable sectors more prone to digital fraud attempts.  The gambling industry exhibited the greatest YoY growth in the rate of suspected digital fraud coming from Namibia in Q1 2022 at 109.1%, with the most prevalent type of fraud in that sector globally being promotion abuse – where a user abuses site promotions such as refer-a-friend, reload deposit bonuses and free giveaways.

The financial services industry experienced the second highest YoY increase in Namibia at 27.5%, where first party application fraud was the most common type of fraud. This occurs  when an individual intentionally completes fraudulent applications that contain inaccurate or manipulated information with the intention of receiving a lower rate or better terms for a policy or contract.

Year-over-year Growth Rates of Suspected Digital Fraud Attempts (Q1 2021 to Q1 2022)

Industries Affected by Fraud

Namibia

Global

Insurance

N/A

+134.5%

Gambling

+109.1%

+50.1%

Logistics

N/A

+42.7%

Travel and Leisure

+36.9%

+13.3%

Gaming

N/A

+6.9%

Communities (online dating, forums, etc.) 

-12.9%

-6.1%

Retail

-15.7%

-7.6%

Telecommunications

-39.1%

-20.4%

Financial Services

+27.5%

-63.6%

“As digital fraud rates stabilise in Namibia during a period when fraudsters are searching for new vulnerabilities, it’s important that organizations shift their focus to identifying more of the ‘good’ customers and transactions to drive revenue and customer lifetime value. By reducing false positives, false declines and manual review rates, organizations can improve their customer experience through trusted connections while still keeping the fraudsters at bay,” said Reddy.

TransUnion derived its conclusions on fraud against businesses  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™. The percent or rate of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions that were assessed for fraud.

For worldwide and regional breakdowns around how much the suspected digital fraud attempt rate recently changed, what types of fraud are most prevalent in certain industries and more, download this infographic.