Suspected Digital Fraud Attempts from Kenya the Highest in Gaming and Logistics

As consumers and businesses continue to use digital transactions as a way to engage in commerce, fraudsters are increasingly using them for their own benefit. A new TransUnion (NYSE: TRU) analysis finds that suspected global digital fraud¹ is up in the first half (H1) ² of 2023, and while retail and video gaming were among the most targeted industries worldwide during that timeframe, digital fraud affected all businesses. 

Among all industries, the global suspected digital fraud rate stood at 5.3% in H1 2023, up from 4.5% one year ago. Of all digital transactions made by consumers in Kenya, 3.7% were suspected to be fraudulent attempts in H1 2023.³

For transactions originating from Kenya, gaming (online sports betting, poker, etc) and logistics had the highest suspected digital fraud attempt rate among industries analyzed in H1 2023 at 10.5% and 9.8% respectively, with the rate in retail at 9.3%.³

Kenyans are, however, increasingly embracing digital transactions, which grew the most among industries analyzed by 269% in financial services and by 76% in video gaming when comparing the first half of 2023 to H1 2022 for transactions from Kenya. With its significant increase in transaction volume, the financial services sector saw a 313% increase in suspected digital fraud volume year-over-year (YoY), and suspected digital fraud in travel and leisure increased by 72% YoY for transactions from Kenya.³

Increases in the number of digital transactions in gaming and logistics (8.0% and 8.4% respectively) may have led to these higher suspected digital fraud attempt rates. In the logistics industry, the number of digital transactions decreased by 21.2% – despite this decline, this sector still has the second highest suspected digital fraud attempt rate in Kenya, and is still vulnerable to fraudsters.

These significant increases in the volume of suspected digital fraud attempts, along with the increased adoption of digital transactions, indicate that Kenyan businesses and consumers should seek meaningful solutions to prevent fraud.

“It’s not enough to look at fraud rates alone when attempting to measure the impact of digital fraud on any one particular industry or another,” said Morris Maina, CEO at TransUnion Kenya. “There are other factors that need to be considered. These include the overall size of the industry in question, whether that industry is growing and if so, how quickly. Only then is it possible to develop a more comprehensive perspective on just how digital fraud is impacting these industries. In addition, this can help identify where fraudsters may be focusing their efforts in future.”

Financial Services Saw the Greatest YoY Growth in Digital Transactions

While Gaming had the Highest Suspected Digital Fraud Rate Coming from Kenya

^{Source: TransUnion TruValidate™ data}

More than Eight in Ten Kenyan Consumers Report Having Been Targeted by Fraud

This new TransUnion analysis comes on the heels of its recent Q2 2023 Kenya Consumer Pulse Study which explored, among other things, consumer awareness of being targeted by any online, email, phone call or text messaging fraud attempt in the second quarter.

According to the study, more than seven in 10 respondents (73%) reported being the target of fraud schemes in the past three months but did not become a victim of it. An additional 8% said they were targeted and fell victim. Among those targeted, the most common scams by which they reported being attached were money or gift card scams (44%), smishing (40%) – fraudulent text messages meant to trick you into revealing personal data – and vishing (40%) – fraudulent phone calls with the same aim. Furthermore, one third (33%) reported being targeted by phishing, fraudulent emails, websites, social posts, QR codes, etc. meant to steal data. ⁴

TransUnion came to its digital fraud findings based on intelligence from its identity and fraud product suite, TransUnion TruValidate, which helps secure trust across channels and delivers efficient consumer experiences. The rate or percentage of suspected digital fraud attempts reflect interactions which TransUnion customers either denied in real time due to fraudulent indicators or determined to be fraudulent after a manual review process—compared to all transactions it assessed for fraud.

Download the Omnichannel Fraud in H1 2023 Infographic for more findings including the rate of suspected digital fraud from select countries and regions globally, and the growing problem of synthetic fraud. Specific country and regional data in the analysis include the United States, Brazil, Canada, Chile, Colombia, Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, Philippines, Puerto Rico, Rwanda, South Africa, Spain, United Kingdom and Zambia.

Consumers who believe they may be a victim of fraud can find resources and information here.

^{1 Digital fraud involves the use of phishing emails, false websites, phony mobile apps, fake social media profiles, and other mechanisms to illegally obtain information and defraud consumers and businesses.}

^{2 The first half of the year or H1 refers to January 1 to June 30}

^{3 TransUnion TruValidate data}

^{4 TransUnion Consumer Pulse Survey}