TransUnion analysis found that 1.1% of transaction attempts^[1] involving consumers in Zambia in 2025 were suspected of digital fraud, well below the global average of 3.8%. Despite the year-over-year (YoY) decline in suspected digital fraud, fraudsters continue to adapt, turning to high-trust, scam-based tactics that can bypass traditional safeguards.

While overall suspected digital fraud rates remain comparatively low, the consumer impact remains meaningful^[2]. Among Zambian consumers surveyed by TransUnion who reported losing money to digital fraud in the past year (defined in the survey as email, online, phone call and text message scams), the median reported loss was ZMW 8,198. This is the lowest among the African countries studied.

These are among the findings in the TransUnion H1 2026 Update: Top Fraud Trends report, which blends insights from a TransUnion consumer survey and its global intelligence network to track how fraud patterns are shifting across markets and digital channels.

“Zambia remains a lower‑to‑mid fraud risk market within Africa, reflecting growing but uneven digital adoption across banking, mobile payments, ecommerce and public services,” said Amritha Reddy, senior director of fraud product management at TransUnion Africa. “However, Zambia is entering a phase where fraud risk begins to rise alongside financial inclusion, rather than remaining opportunistic or isolated.”

“Global trends show that fraud does not wait for full digital maturity,” she added. “It emerges early as trust in mobile and financial systems grows faster than identity, authentication and oversight controls. Zambia still has time, but the signals show that risk is building.”

Third-Party Seller Scams Emerge as the Top Driver of Consumer-Reported Fraud Losses in Zambia

Zambian consumers are increasingly facing coordinated, identity-driven and cross-channel fraud with attacks moving deeper into everyday digital interactions.

Among Zambians who reported losing money to digital fraud over the past year, one third (33%) said third-party seller scams on legitimate ecommerce sites were responsible. This indicates that losses are not occurring in obviously unsafe environments, but within credible, familiar and trusted spaces.

“Even in a lower risk market like Zambia, fraudsters are prioritising mainstream platforms that appear familiar and legitimate,” Reddy said. “This mirrors global fraud patterns, even though absolute loss values remain lower.”

Chart 1: Most Prominent Cause of Consumer-Reported Fraud Loss in Zambia – 2025

Source: TransUnion consumer survey

Digital Fraud Risk is Highest at Account Creation in Zambia

Even when overall suspected fraud rates appear lower than 2024, risk can remain elevated at specific points in the digital consumer lifecycle, particularly where criminals attempt to create or manipulate identities.

In 2025, Zambia recorded its highest suspected digital fraud rate across the consumer lifecycle at account creation (13.7%), the highest rate among the African countries studied, and well above the global average of 8.3%. This was followed by account login (0.7%) and during financial transactions (0.3%).

“Zambia’s fraud profile reflects an early stage of digital growth, where onboarding and identity creation are currently the most exposed points,” Reddy said. “Experience from other markets shows that failure to strengthen protection early on often sees rapid escalation of login-based fraud later. Strengthening identity verification and early-stage controls now can materially reduce downstream fraud risk later,” she added.

Zambians Accept Some Friction if They’re Protected from Fraud

Findings from the TransUnion survey also show that the top features Zambian consumers value when choosing whom to transact with online are confidence that their personal data is secure (95% rated this as very important), easy payment processes (89%), and ease of filling out forms and applications (82%).

“Consumers are clearly willing to accept friction when it is linked to protection,” Reddy said. “Security in Zambia is evolving beyond compliance and emerging as a key driver of trust and brand, not just compliance.”

Retail Transactions Show the Highest Suspected Digital Fraud Risk Among Sectors Analysed

Across Africa, suspected digital fraud risk varies by industry. In Zambia, retail transactions recorded the highest suspected digital fraud rate in 2025 at 2.8%. As more services converge around mobile identity, real‑time connectivity and platform‑based interactions, fraud increasingly appears wherever users are most active and not only where money changes hands.

“Zambia has entered an advanced fraud phase where criminals exploit trust rather than technical weaknesses,” she added. “This reinforces the importance of protecting identity and access points early.”

Chart 2: Top Three Sectors Experiencing Suspected Digital Fraud Attempts from Zambia

Source: TransUnion global intelligence network

What Consumers and Businesses Can Do

As fraud tactics evolve, consumers can help reduce risk by safeguarding personal information, remaining cautious with unsolicited calls and messages, and regularly reviewing their credit information for suspicious activity.

Zambia benefits from active government and regulatory engagement in financial oversight, consumer protection and digital governance. Global experience shows that markets which align financial inclusion with early regulatory frameworks are better positioned to prevent fraud from scaling as adoption increases.

“Zambia is not facing a fraud crisis, but it is clearly a market in transition,” Reddy said. “Fraud risk is evolving alongside digital inclusion, formalisation and growing consumer trust. These patterns closely resemble the early stages observed in other markets that later experienced rapid fraud growth.

“For organisations and institutions operating in Zambia, there is a clear opportunity to act early,” she added. “Strengthening onboarding, mobile identity and cross‑channel protections in collaboration with regulators can support inclusive, trusted, and sustainable digital growth, while helping to maintain fraud prevention as Zambia’s digital ecosystem continues to mature.”

TransUnion’s insights are based on a global survey of 12,730 consumers in 18 countries and regions, conducted between Nov. 20–Dec. 9, 2025, alongside intelligence from its suite of TransUnion fraud prevention solutions. To learn more about how TransUnion fraud prevention solutions can help businesses avoid fraud and prevent fraud losses, click here. 

Specific country and regional data in the report includes Zambia, 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 Kingdom, and the United States. Download the TransUnion H1 2026 Update to the Top Fraud Trends Report for more information and insights about the global fraud trends.

^[1] 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.

^[2] TransUnion surveyed 365 consumers in Zambia from Nov. 21 to Dec. 8, 2025. 

According to the new TransUnion® (NYSE: TRU) H2 2025 Update to the Top Fraud Trends Report, Zambia recorded the highest rate of suspected digital fraud^[1] in the consumer lifecycle at account creation. In the first half of 2025, 11.5% of account creation attempts by consumers in the country was suspected of digital fraud. This is in alignment with account creation fraud being the highest in the consumer lifecycle globally where 8.3% of those types of transaction attempts were suspected of digital fraud in H1 2025.

The report, which draws on proprietary data from TransUnion’s global intelligence network from billions of transactions from over 40,000 websites and apps and a consumer survey across 18 countries, reveals that fraud is growing in certain areas.

“Digital fraud is increasing in Zambia with AI-driven fraud and synthetic identities emerging as significant threats,” said Amritha Reddy, senior director of fraud product management TransUnion Africa. “As mobile and internet penetration grow, fraud risks are expected to increase.”

According to analysis of TransUnion’s customers in its global intelligence network, digital account takeover volume worldwide grew 21% year-over-year (YoY) from H1 2024 to H1 2025, signalling a rapid escalation. The volume of digital account takeovers surged 141% from H1 2021 to H1 2025, underscoring a persistent rise of this fraud type over time and reflecting the increasing sophistication of fraudsters who exploit stolen credentials and bypass authentication systems.

"As account takeover fraud surges, businesses can no longer afford solely reactive defences,” said Reddy. “The growing sophistication of fraudsters demands a proactive investment in layered security and identity intelligence. In today’s threat landscape, protecting customer accounts is not just a priority, it’s a business imperative."

Highest Rate of Suspected Digital Fraud in Video Gaming

Among industries analysed globally, the video gaming sector recorded the highest percentage of suspected digital fraud attempts in the first half of 2025, reaching 13.5%. This represents a significant 28% rate increase compared to the same period in 2024, underscoring the growing vulnerability of this sector to fraudulent activity.

For transactions where the consumer was in Zambia, the rate of suspected digital fraud attempts in H1 2025 was the highest in financial services at 1.9%.

Chart 2: Suspected Digital Fraud Attempts in Zambia, by Sector

^{Source: TransUnion global intelligence network}

“As the risk from consumer scams threatens identity integrity, organisations should rely on a mixture of data, risk signals, technology and tools to prevent fraud,” said Reddy. “The report highlights that business leaders rank^[2] identity verification, device reputation and behavioural biometrics as the leading three fraud prevention technologies.”

“Businesses and financial institutions should also invest in sustained education and awareness campaigns to mitigate against schemes like account takeovers. Preventing fraud must by necessity be a multi-pronged strategy, if businesses and consumers are to stay ahead of fraudsters whose strategies continue to evolve too,” she said. “By harnessing advanced technologies, fostering cross-sector collaboration and prioritising consumer trust, Zambia can chart a path toward a secure and inclusive digital future.”

Consumer-Reported Exposure to Fraud High Amid Gaps in Awareness and Prevention

Globally, consumers continue to face a wide range of scams, with tactics often tailored to regional behaviours and vulnerabilities. TransUnion’s survey found that 48% of consumers surveyed globally reported being targeted by email, online, phone call or text messaging fraud from February to May 2025, with 85% of Zambians saying the same thing. Globally, 52% were unaware that they were targeted, as were 15% of Zambians, indicating potential fraud under-recognition and a gap in fraud awareness.

Consumers in five of the six African countries surveyed reported money or gift card scams as the most experienced fraud type. In Zambia, money or gift card scams was the most common fraud type – reported by 49% of those who said they were targeted with fraud from February to May 2025. Among those Zambians who said they were targeted, the next most frequently reported scams were smishing (42%), phishing (35%), and vishing (31%), with these three designed to deceive individuals into giving up their valuable personal or financial information.

Nearly One in Ten Zambians Indicated They Fell Victim to Fraud from February to May 2025, Mid-Range Compared to Other African Countries Studied

   ^{Source: TransUnion consumer survey}

“By leveraging data intelligence, AI-driven fraud prevention, cross-sector collaboration and public education, Zambia can outpace emerging threats and build a digital ecosystem rooted in trust,” said Reddy. “A safer digital Zambia is achievable when trust becomes a shared responsibility. As scammers continue to evolve their tactics to enrich themselves, it’s more important than ever for consumers to regularly review their credit reports to ensure all listed information is accurate.”

TransUnion came to its conclusions about digital fraud based on intelligence from its array of TransUnion fraud prevention solutions. To learn more about how TransUnion fraud prevention solutions can help businesses avoid fraud and prevent fraud losses, click here.

Specific country and regional data in the report includes Zambia, 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, Spain, South Africa, the United Kingdom, and the United States. Download the TransUnion H2 2025 Update to the Top Fraud Trends Report for more information and insights about the global fraud trends.

^{[1] Suspected digital fraud attempts reflect 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.}

^{[2] As found by TransUnion’s online business survey conducted from 29 May to 6 June 2025 in partnership with third-party research provider, Dynata. Findings were included in TransUnion’s H2 2025 Update to the Top Fraud Trends Report}

Zambians were optimistic about their financial health during Q2 2025, with nearly eight in ten (79%) feeling optimistic about their household finances for the coming year and 82% of all surveyed expecting their income to increase in the next 12 months. Over one third (34%) of respondents reported an increase in household income over the past three months, while 36% said that their finances were better than planned.

According to the TransUnion Consumer Pulse Study for Q2 2025*, Zambians had further positive financial news: 38% had paid debt down faster in the past three months – up eight percentage points (pp) from a year ago – and 25% said that they had saved more in an emergency fund in that time period.

Despite their relatively positive income outlooks, Zambians were concerned about macroeconomic dynamics, including inflation, jobs and housing prices. During the quarter studied, 79% listed inflation as one of their top three financial concerns in the next six months, followed by housing prices (rent or mortgage) at 59% and jobs at 58% (nine pp higher than Q2 2024). Possibly due to these concerns, in the past three months, 55% of consumers indicated they had cut back on discretionary spending (e.g., dining out, travel, entertainment); 44% cancelled or reduced digital services (e.g., wireless, cable TV, internet); and 41% cancelled subscriptions or memberships (seven pp higher than Q2 2024).

“Zambian consumers are demonstrating remarkable resilience and optimism in the face of economic challenges, while prioritising essential expenses and actively trimming non-essential costs to maintain financial stability,” said Mildred Stephenson, CEO of TransUnion Zambia. “As access to credit and digital trust becomes increasingly vital, it’s clear that empowering consumers with the right tools and protections will be key to sustaining this resilience.”

Regarding payment obligations, 35% expected to be unable to pay at least one of their current bills or loans in full. Among these respondents, almost half (48%) said they would pay their current bills and loans with a partial amount they could afford. Meanwhile, 45% planned to take on temporary/gig work to service their debts, and 35% intended to borrow money from a friend or family member. Finally, 28% of respondents said they would use savings.

Zambians Believe Credit Can Help Achieve Their Financial Goals

During the quarter studied, 94% of respondents viewed access to credit and lending products as important to achieve their financial goals, yet only 42% felt they had sufficient access. Among all surveyed, 45% planned to apply for new or refinance existing credit within the next year. Among them, the most popular credit products they said they’d apply for were new personal loans (46%) and refinancing existing personal loans (37%). Additionally, 23% said they’d apply for buy now, pay later services and 20% a new student loan.

More than half (54%) considered applying for credit or refinancing but ultimately chose not to proceed. High borrowing costs (36%) and not enough difference to payments when refinancing (30%, up 10 percentage points from a year ago) were the main reasons Zambians were hesitant to pursue credit. These trends, likely driven by broader economic pressures, continue to discourage engagement with formal credit channels.

Rising interest rates also influenced consumer behaviour. More than half (56%) said interest rate increases had a high impact on whether or not they would apply for credit in the next 12 months, while 29% reported a moderate impact.

“These trends underscore a growing sensitivity to economic conditions and highlight the need for more affordable, transparent and flexible credit solutions,” Stephenson said.

Zambians Concerned About Fraud

As fraud attempts continue to proliferate in Zambia, consumers are feeling their effects beyond being victims. For instance, when it comes to using digital technology in new ways, 49% of survey respondents cited cybersecurity threats as a major barrier to doing so, while 39% expressed concerns about identity theft.

Stolen identity (50%), credit/payment card fraud (46%) and data breaches (40%) were the cyber threats that most concerned surveyed consumers. Identity attack methods respondents said they were most concerned about were becoming a victim of fake social media profiles (69%), personal information exposed in data breaches (51%), email phishing (50%), and viruses or malware (43%). More than three quarters (76%) reported being targeted by email, online, phone call or text message fraud in the last three months but didn’t fall victim. An additional 9% said they were both targeted and fell victim. High-income consumers (ZK108,000 and more annually) were particularly affected: 91% reported being targeted — at least seven percentage points higher than other income groups.

“Zambian consumers continue to display resilience amid challenging economic conditions,” said Stephenson. “Managing their credit effectively and taking steps to prevent fraud will see Zambians benefit from the country’s expected growth rebound¹.”

Consumers can find out more about their credit report from TransUnion here.

#ends

^{*This online survey of 325 adults was conducted May 5–25, 2025 by TransUnion in partnership with third-party research provider, Dynata. Adults 18 years and older residing in Zambia were surveyed using an online research panel method across a combination of desktop, mobile and tablet devices.}

^{1 2025 Economic Outlook}

Seventy-nine percent of Zambians TransUnion surveyed from 21 November to 11 December 2024 indicated that they had been targeted by email, online, phone call or text messaging fraud in the last three months with 9% saying that they had become victims in the last three months. Among those who said they were targeted, the most reported schemes were smishing where fraudulent text messages attempt to trick users into revealing data (35%), phishing where fraudulent emails, websites, social posts or QR codes attempt to steal data (32%), vishing where fraudulent phone calls induce users to reveal information (26%) and social engineering scams where fraudsters try to persuade people to give them personal information (26%).

In a separate question in the same survey, more than one third (36%) said that they had lost money to email, online, phone call or text messaging fraud in the last year. Nearly three in ten (27%) of Zambians who said they lost money reported it happening from third-party seller scams on legitimate retail websites. This was followed by 24% who had lost money in money mule scams where users are solicited to transfer illegally acquired money and 19% who lost money in social engineering scams where someone is persuaded to give up personal information or money.

These and other findings came from research used for building the recently released TransUnion (NYSE: TRU) H1 2025 Update to the State of Omnichannel Fraud Report, which shows how Zambian consumers continue to be targeted by fraudsters through a wide range of channels.

“Zambians use mobile phones to conduct their everyday business, connect with friends, or send and receive money, so it’s easy to understand why smishing would be such a common fraud tactic among fraudsters targeting this region,” said Amritha Reddy, senior director of fraud solutions at TransUnion Africa. "While cybercriminals will attack at any time using any channel, they appear to focus on channels most popular in the regions they are targeting.”

More than one fifth (21%) of Zambian respondents indicated that they were not aware of being targeted by email, online, phone call or text messaging fraud at all, which raises questions as to whether these respondents were in fact targeted yet were simply unaware of the threat.

Based on the TransUnion study, Zambia had the lowest percentage of respondents among countries surveyed in Africa who said they fell victim to email, online, phone call or text messaging fraud in the second half of 2024. In contrast, South Africa had the highest percentage of consumers who said they fell victim to fraud among the countries surveyed across the continent.

Table 1: Fraud Types Most Frequently Used to Target Consumers in Sub-Saharan Africa in the Last Three Months

   Source: TransUnion Consumer Pulse Survey of 411 people in Zambia in December 2024

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

Globally, TransUnion determined that communities (online forums and dating sites) experienced the highest rate of suspected digital fraud^[1] attempts in 2024. Nearly 12% of all attempted transactions within communities were suspected to be digital fraud last year. This is closely followed by video gaming (11%), with gaming (including online betting, poker, etc.) at 8% and retail (8%) rounding out the top four.

The logistics industry, which has seen growth in shipping fraud (often perpetrated by organized crime rings), saw the greatest suspected digital fraud volume growth globally in 2024, up more than 100% over 2023. The fraud rate remains at a relatively modest 3%. Gaming also 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. In 2024, it appears that fraudsters targeted these areas with a renewed vigour,” said Reddy. “Cybercriminals take advantage of the trust inherent on community-based platforms, and target members with a wide range of scammer solicitations, the most reported type of digital fraud in communities.”

For attempted transactions where the consumer or fraudster was located in Zambia, retail experienced the highest suspected digital fraud attempt rate in 2024 at 6.8% with a 15.4% increase in the volume of suspected digital fraud from 2023. The biggest increase in suspected digital fraud attempts was in insurance which increased 311.1% YoY.

“It is encouraging to see that attempts at digital fraud have decreased across all but three of the surveyed industries in Zambia,” Reddy says. “Organisations that draw on identity, device and behavioural insights to help them interact with legitimate consumers while mitigating fraud risk are more likely to protect themselves and their customers from the scourge of digital fraud.”

Table 2: Highest Digital Fraud Rates Across Leading Industries in Zambia

Source: TransUnion TruValidate™

Digital Fraud Comes with a Heavy Cost to Consumers

Consumers faced significant losses due to fraud. Among consumers TransUnion surveyed in 18 countries and regions in November and December 2024, 29% said they lost money due to email, online, phone call or text messaging fraud in the last year. The survey determined that the median amount those consumers said they lost due to fraud in the past year was ZK48,787. For those who said they lost money due to fraud in Zambia, the median stated amount lost was ZK6,479^[2].

TransUnion came to its conclusions about digital fraud based on intelligence from TransUnion TruValidate.

Specific country and regional data in the report includes Zambia, Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Guatemala, Hong Kong, India, Kenya Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, Spain, South Africa, the United Kingdom, and the United States. Download the TransUnion H1 2025 Update to the State of Omnichannel Fraud Report for more information and insights about the global fraud trends.

^{[1] 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.}

^{[2] Based on the exchange rate on 6 Jan. 2025}

The findings from TransUnion Consumer Pulse Study for Q2 2024 revealed a slight improvement in credit access but a significant surge in credit demand. According to the study, consumer demand for credit increased, with 48% of respondents planning to seek new or refinance existing credit within the next year, an increase of 10 percentage points from 2023. While 96% of respondents considered access to credit and lending products important for achieving their financial goals, only 32% felt they had adequate access, a slight improvement from 30% the year before. Among those intending to apply for credit, 53% considered new personal loans, with Millennials and Gen X showing the most interest in this type of credit.

To help consumers navigate these financial challenges, Mildred Stephenson, Chief Executive Officer at TransUnion Zambia, offers the following tips to ensure individuals understand their options and make informed choices that can contribute to increased financial inclusion:

1. Create a Budget: Track your income and expenses to understand where your money is going. This will help you identify areas where you can cut back and save more. It will also help you determine if you can afford repayments on any credit you might be applying for.
2. Build an Emergency Fund: Set aside money for unexpected expenses. This can prevent you   from relying solely on credit during financial emergencies.
3. Pay Bills on Time: Late payments can negatively impact your credit score. Set up reminders or automatic payments to ensure you never miss a due date.
4. Use Credit Cards Responsibly: Use credit cards wisely and avoid carrying a balance from month to month whenever possible. Pay off your credit card balance in full each month to avoid interest charges.
5. Avoid Unnecessary Debt: Only take on debt that is necessary and manageable. Before applying for new credit, consider whether it is essential and if you can afford the repayments.
6. Monitor Your Credit Report: Regularly check your credit report to ensure there are no errors and to keep track of your credit score. This can help you identify and address any issues early on.
7. Accessing your credit report: Your credit report is a crucial document that provides a summary of your personal financial history. Regularly checking your credit report helps you ensure the information is accurate and spot any signs of identity theft early

To obtain your credit report, you can:

• Call TransUnion: At 0211 220 530/36/420500 or 0955985107/5307.
• Email TransUnion: Send an email to CustomerCareZM@transunion.com 
• Visit TransUnion at:  5th Floor, Sun Share Tower, Plot No. 15584 / 1, Katima Mulilo Road, Olympia, Lusaka, Zambia.

“We recognise the critical role financial literacy plays in empowering Zambians to make informed financial decisions. By understanding and improving credit health, managing debts responsibly and enabling a culture of informed financial choices, we can collectively build a more financially inclusive and resilient Zambia. At TransUnion, we are committed to providing the necessary tools and insights to support this journey towards financial empowerment.” concludes Stephenson.

The analysis reviewed attempted ecommerce transactions from across the globe and found that 4.6% worldwide were suspected to be Digital Fraud over the same period. Based on proprietary insights from TransUnion’s global intelligence network, TransUnion found that the global suspected Digital Fraud rate was down from 6.0% during the same period in 2023.

The study determined that the average volume of suspected Digital Fraud attempts on any given day during that holiday period globally was 30.2% lower than the same period in 2023 and 5.9% lower than during the rest of the year (1 January 2024 to 27 November 2024).

The Percentage of Suspected Ecommerce Fraud during Black Friday season vs. Overall

Source: TransUnion TruValidate™

“Across Africa, we have observed that Black Friday shopping has extended beyond the original five-day period, with retailers promoting sales throughout the entire month of November. We anticipate that the general lengthening of the holiday shopping season were factors in the decline in suspected Digital Fraud during the time under analysis compared to the rest of the year for most Africa countries,” said Amritha Reddy, senior director for solutions at TransUnion Africa. “For online retailers, this speaks to the need to maintain diligence year-round. For the remainder of this holiday shopping season, and beyond, online retailers must continue to implement tools that maintain a friction-right experience, wherein both business and consumer is protected without major disruption.”

The greatest fraud disruptions globally over the analysed period occurred on Thursday, 28 November with 5.3% of all attempted digital retail transactions on that day suspected to be Digital Fraud. The analysis also revealed the retail suspected Digital Fraud rate for each day in the analysed shopping period for attempted transactions where the consumer was in each of the six African countries studied, and highlighted the day on which the most suspected Digital Fraud took place.

The Suspected Ecommerce Fraud Rate Varies for Each Day of the 2024 Holiday Shopping Weekend

Source: TransUnion TruValidate

As part of this analysis, TransUnion also determined the top signals indicating risk of fraudulent ecommerce transactions during the holiday shopping season globally. This year, unusually high transaction volume from a single device and devices being newly associated with an account were among the leading indicators for potential fraud attempts.

“This international shopping period is always hugely impactful to retailers’ bottom lines, and our recent Consumer Pulse Study that consumers may be particularly eager to buy during this holiday shopping season,” said Reddy. “It’s as important as ever for retailers to equip themselves with the tools they need to detect fraud early. These tools can help minimise fraudulent transactions while at the same time protecting legitimate transactions. Retailers should seek to implement holistic fraud solutions that can verify customer identity and authenticity as early as possible during a transaction.” 

Consumers and businesses can take steps to prevent fraudulent activity:

For consumers:

1. Verify website security: Ensure that the websites you shop from use secure protocols (look for "https" in the URL).
2. Be sceptical of unrealistic deals: Bad actors often lure shoppers with "too good to be true" discounts.
3. Use secure payment methods: Utilise verifiable, trusted, and secure payment methods.
4. Protect personal information: Share only necessary information during transactions to avoid identity theft.
5. Monitor financial statements: Regularly review bank and credit card statements, store cards, etc., for unauthorised activity.
6. Beware of phishing scams: Avoid clicking links or downloading attachments from unknown emails or texts.
7. Strengthen account security: Use strong, unique passwords and enable multi-factor authentication on critical accounts.

For businesses:

1. Train employees: Educate employees on spotting fraud threats.
2. Communicate with consumers: Send warnings on fraud tactics and how to verify legitimate vs. illegitimate transactions.
3. Leverage real-time fraud verification tools: Monitor transactions closely for anomalies, especially during peak shopping periods.
4. Establish clear protocols: Set clear protocols for reporting and responding to fraudulent attempts.

These preventive measures are crucial, especially considering TransUnion's findings on Digital Fraud. 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. The country and regional analyses examined transactions in which the consumer or suspected fraudster was located in a select country and region when conducting a transaction. Global statistics represent every country worldwide.

To find out how this data varies by select countries and more, TransUnion’s holiday fraud trends can be found here.

In the first half (H1) of 2024, 1.9% of all attempted digital transactions where the consumer was located in Zambia were identified as suspected Digital Fraud in a recent TransUnion® (NYSE:TRU) analysis. Zambia had the second lowest rate of suspected Digital Fraud in the first half of 2024 out of the 19 countries and regions for which TransUnion provided regional breakdowns.

TransUnion also determined that retail, financial services and gaming were the industries that had the highest suspected Digital Fraud rate for transactions where the consumer was in Zambia during the analysis period.

Some of these findings are in the newly released TransUnion H2 2024 Update to the State of Omnichannel Fraud Report, which explores fraud trends in the first half (Jan. 1-June 30) of this year. It found that some industries were particularly targeted, even though Digital Fraud affects many industries in Zambia.

This is at a time when 83% of Zambian consumers said in Q2 2024 that they were targeted with online, email, phone call or text messaging fraud attempts in the last three months, and of those consumers only 8% reported falling victim^[1].

“Despite the good-faith efforts that are being made by global organisations to identify and prevent fraud to date, fraudsters continue to evolve. In that sense, businesses should ensure that they are taking advantage of fraud prevention technologies such as identity verification, IP intelligence, device reputation and synthetic identity detection as critical components of their fraud prevention programs,” said Amritha Reddy, senior director of fraud solutions at TransUnion Africa.

Table 1: Industries with the Highest Rate of Suspected Digital Fraud Attempts Where the Consumer was in Zambia in H1 2024

Source: TransUnion TruValidate™

The communities industry experienced the largest percentage (11.5%) of suspected Digital Fraud globally in H1 2024, according to data in TransUnion TruValidate. Globally, TransUnion’s communities customers reported profile misrepresentation (where a user posts inaccurate information in a profile and/or uses bogus profile photos) as the most frequent type of Digital Fraud they witnessed in H1 2024. Communities was the industry with the highest suspected Digital Fraud rate in seven of the 19 countries and regions for which TransUnion provided breakdowns in H1 2024.

New Account Fraud Risk Threatens Digital Experiences

Digital fraud can occur at different steps in a customer’s transaction process, and more than two-thirds of business leaders surveyed by TransUnion indicated that at least 25% of their organisation’s new account openings are done online, with more than a third saying that it was 51% or more^[2]. For transactions where the consumer was in Zambia, 12.7% of digital account opening attempts were suspected of Digital Fraud, with 1.5% of digital account login attempts also being suspected of Digital Fraud in H1 2024.

“Digital Fraud waxes and wanes, but the trends in cybercrime and consumer scams are clear,” said Mildred Stephenson, CEO of TransUnion Zambia. “Now and in the future, organisations face more sophisticated cybercriminals weaponizing identity data at scale to perpetuate first- and third-party fraud schemes. Fraud prevention is a necessary cost that needs to be as efficient as possible, using better data and risk signals, advanced analytics, and integrated technology, without increasing lost business and additional expense from false positives.”

TransUnion also determined synthetic identity fraud (the use of personally identifiable information or PII to fabricate a person or entity in order to commit a dishonest act for personal or financial gain) was the fastest growing Digital Fraud type volume-wise globally reported to TransUnion by its customers from H2 2023 to H1 2024, increasing 153%. Electronic fund transfers (also known as ACH/debit payments) fraud saw the highest YoY volume growth worldwide, up 113% from H1 2023 to H1 2024. However, promotion abuse (consumers or fraudsters taking advantage of marketing offers to receive unintended financial incentives) was the most common Digital Fraud type globally in H1 2024, accounting for 3.6% of all Digital Fraud reported to TransUnion by its customers.

About the Analysis

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 H2 2024 Update to the State of Omnichannel Fraud Report to learn more. Specific country and regional data in the report include Zambia, Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, Rwanda, South Africa, the Philippines, Puerto Rico, Spain, the United Kingdom, and the United States.

^[1] TransUnion survey of 500 Zambian consumers from May 1-20, 2024

^[2] TransUnion business survey of 801 business leaders from May 14–29, 2024

According to information and insights company TransUnion’s latest Consumer Pulse Survey, Zambian households are facing significant financial challenges like small business closures, job losses and rising inflation.

According to the study, 33% of households reported an increase in income (a five percentage-point drop from Q2 2023) and 29% reported a drop in their income over the past three months. Despite this, 79% of consumers expect their incomes to improve over the next 12 months, although this was three percentage points lower than a year ago.

“While consumers are cautiously optimistic about their future incomes, elevated inflation and tight lending conditions will continue to weigh on household consumption in 2024,” says Mildred Stephenson, CEO TransUnion Zambia.

Consumer responses to economic strain

With inflation having risen to 13.8% in April 2024, the number of consumers who expect to be able to pay all of their current bills and loans in full dropped to 65% (down two percentage points from the same time last year). This financial pressure may have led many to consider paying their current bills and loans by taking on temporary work (47%), making partial payments (39%) or borrowing from friends and family (29%).

Possibly in response to rising interest rates, 30% of respondents said they paid down their debt faster in the last three months – down seven percentage points from a year ago. This could be a result of disposable incomes having taken a knock with bank lending rates increasing to 28% in May 2024 (their highest level since 2020). In May, the Bank of Zambia also raised its policy rate by 100 basis points to 13.5% to address persistently high inflation – with no anticipated monetary easing until 2025.

Spending also appears to have been affected by the increasing rates. Over the past three months, 61% of consumers reported reducing their discretionary spending (dining out, travel, entertainment) and half of the surveyed households (50%) said they had cancelled or reduced digital services (a 10 percentage-point increase from Q2 2023).

Almost one in four households (26%) reports boosting their contributions to emergency funds, but a concerning trend was the rise in consumers reporting reduced retirement savings at 18% (versus 11% last year).

Looking ahead, consumers plan to pay more on bills and loans (47%) and medical services (45%), and boost retirement funds and investing (40%) in the next three months.

Credit access and demand

While 96% of Zambian respondents consider access to credit important for achieving their financial goals, only 32% feel that they have adequate access – a slight improvement from 30% last year.

In Q2 2024, the demand for credit surged with 48% of consumers planning to seek new or refinance existing credit in the next year, a notable 10 percentage-point increase from a year ago. Millennials (27–42 years old) and Gen X (43–58 years old) showed the highest demand at 54% each. Among those planning to apply for new or refinance existing credit within the next year, 53% said they’ll apply for a new personal loan in the next year, a significant 12 percentage-point jump from last year. Millennials (57%) and Gen X (64%) showed the most appetite for new personal loans.

However, 47% of potential borrowers reported abandoning their plans to take out new credit, with 38% citing the high cost of credit as the top reason for this decision.

Monitoring credit reports

Monitoring their credit status is viewed as extremely, very or moderately important by 90% of consumers, yet just below half (49%) say they review their credit reports monthly, and 27% don’t monitor them at all. A growing number of consumers (49%, up from 47% last year) believe that incorporating alternative data, such as rental payments and gym memberships would improve their credit scores.

Fraud concerns

Ecommerce is on an upward trend with 34% (compared to 28% last year) of respondents saying they conduct over half their transactions online. However, fraud poses a significant concern, with 75% reporting that they were targeted online, email, phone call or text messaging fraud in the past three months but avoided falling victim.

Among those who said they were targeted, money and gift card scams were the most common reported methods, at 50%, (up from 46% last year) followed by smishing (43%), and phishing and vishing (both at 36%). Consumer concern regarding sharing personal information remains notably high, at 95%. The main concerns included invasion of privacy (79%), fear of identity theft (77%) and receiving unsolicited marketing communications (40%).

“These findings highlight the importance of robust data protection measures and privacy policies. At the same time, consumers should check their credit reports regularly to flag any possible fraud that affects their credit scores, as early as possible,” says Stephenson.

Consumers can find out more about their credit report from TransUnion here.

TransUnion found across industries in 2023, 1.5% of all transactions where the consumer was in Zambia were flagged as being suspected Digital Fraud – a 40% YoY increase.

The TransUnion report revealed that nearly one in seven (13.5%) newly created accounts are suspected to be created via Digital Fraud globally, largely driven by bad actors using fabricated or stolen identities. This may indicate a shift in the tactics deployed by fraudsters 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. 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%), travel and leisure (36.0%), and video gaming (31.5%).

Similarly, for transactions where the consumer was in Zambia, the highest percentage of suspected Digital Fraud in the online customer journey occurred at account creation, at 9.2%, varying widely by industry.

“This early-phase new account Digital Fraud may represent a paradigm shift of sorts among fraudsters,” said Mildred Stephenson, chief executive officer at TransUnion Zambia. “Instead 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.”

Retail Saw the Highest Suspected Digital Fraud Rate in 2023 Globally, While Financial Services Saw the Highest Rate in Zambia*

Source: TransUnion TruValidate™

Overall, the study found that 5% of all global digital transactions were suspected to be Digital Fraud in 2023, with the volume of risky transactions up 14% YoY and 105% from 2019 to 2023. This growth continues to outpace the growth in overall digital transactions, which rose 90% from 2019 to 2023.

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 telecommunications industry saw a 111% YoY increase in the suspected Digital Fraud rate, up to 4.5%.

“In recent years, the global retail industry has consistently been among those with the highest suspected fraud attempt rates. However, in 2023 we saw it climb to the top of the list,” said Stephenson. “As a result of credentials stolen in data breaches, often in industries other than retail, it has become increasingly easy for fraudsters to perpetuate attacks that leave retailers vulnerable to account takeover.”

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 reflect those that 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 report’s findings are based on proprietary insights from TransUnion’s global intelligence network, and includes data from Zambia, Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, South Africa, Spain, the United Kingdom, and the United States.

For more information and insights about the global fraud trends download the TransUnion 2024 State of Omnichannel Fraud Report to learn more.

*Some industries were excluded from the Zambia study due to a lack of statistically significant data.

Globally, the analysis found 3.6% of all e-commerce transactions over the Black Friday period (23 – 27 November 2023) were suspected to be fraudulent. TransUnion also determined that the average number of suspected digital fraud attempts on any given day during that holiday period globally was 15% higher than the same period in 2022, yet 50% lower than during the rest of 2023.^[1]

The Percentage of Suspected E-Commerce Fraud at the Beginning of the Festive Shopping Season, Compared to the Rest of the Year

* ^{Includes 11 November for Hong Kong}

“Just as the holiday season drives consumers online to begin shopping for gifts for their loved ones, so does it become a destination for fraudsters seeking to take advantage of this time for their financial gain,” said Steve Yin, global head of fraud at TransUnion. “Online retailers must ensure that consumers shopping their sites for the best deals are at the same time protected from fraud in the most seamless and friction-right way possible.”

The study also revealed the suspected digital fraud rate for each day in the holiday shopping period for transactions where the consumer was in Zambia during the transaction and globally. Unlike last year when the Sunday (27 November 2022) of the holiday shopping weekend saw the highest suspected digital fraud rate of 1.83%, the rate during the 2023 holiday period was the highest on Thursday 23 November, at 11.6%.

The Suspected Digital Fraud Rate Varies for Each Day of the 2023 Holiday Shopping Weekend

As part of this analysis, TransUnion also determined the top indicators of fraudulent e-commerce transactions during the holiday shopping season globally. This year, transactions per IP (triggered with an unusual volume of activity from a single Internet Protocol (IP) address to a customer’s site in a short time) and transactions per device (triggered with an unusual volume of activity from a single device to a customer’s site in a short time) were the leading indicators for potential fraud attempts.

“The upcoming holidays mark the biggest shopping season of the year for retailers, but equipping themselves with the proper tools to detect fraud at the first warning sign is a year-round priority said Mildred Stephenson, chief executive officer at TransUnion Zambia.  “A critical way to minimise fraudulent transactions while at the same time protecting legitimate ones involves implementing holistic fraud solutions that can verify customer identity and authenticity at the very beginning of a transaction, including both account creation and login.”

TransUnion came to its conclusions primarily 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.

To find out how this data varies by select countries and more, TransUnion’s holiday fraud insights can be found here.

Consumers interested in obtaining their TransUnion credit report can dial 0211 220 530/36/420500 and 0955985107/5307, or send an email to CustomerCareZM@transunion.com then follow the instructions.

^[1] For Hong Kong, all holiday analysis also includes Nov. 11

Among all industries, the global suspected digital fraud rate stood at 5.3% in H1 2023, up from 4.5% one year ago¹. Of all transactions made by consumers in Zambia, 1.6% were suspected to be fraudulent attempts in H1 2023.³

For transactions originating from Zambia, financial services and telecommunications industries had the highest suspected digital fraud attempt rate among industries analyzed in H1 2023 at 12.1% and 2.5% respectively. While the suspected digital fraud rate in gaming (online sports betting etc) was 1.1%, this reflected a 199% year-over-year (YoY) volume increase.

With a 10% growth in transaction volume when comparing H1 2022 to H1 2023, the financial services sector saw a 262% increase in the volume of suspected digital fraud attempts year-over-year (YoY), with suspected digital fraud in telecommunications increasing by 92%, and by 62% in travel and leisure for transactions from Zambia.

Although the number of digital transactions in gaming from Zambia increased the most among all industries analyzed in H1 2023 at 583%, the rate of suspected digital fraud attempts in this industry coming from Zambia was only 1.1%. However, the volume of suspected digital fraud increased by 199% YoY. ³  

These significant increases in the volume of suspected digital fraud attempts, along with the increased adoption of digital transactions, indicate that Zambian 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 Mildred Stephenson, chief executive officer at TransUnion Zambia. “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.”

Gaming Saw the Greatest YoY Growth in Digital Transactions

while Financial Services had the Highest Suspected Digital Fraud Rate Coming from Zambia

^{Source: TransUnion TruValidateTM data}

^{*Video gaming was not included in Zambia’s reporting as volumes were statistically insignificant}

More Than Four in Five (85%) Zambians Report Having Recently Been Targeted by Fraud

This new TransUnion analysis comes on the heels of its recent Q2 2023 Zambia 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.  

The study⁴ found that 76% of Zambians reported being targeted by a fraud scheme but didn’t become a victim of it, and 9% said they had been targeted and fell victim in the last three months. Among those targeted, the most frequent fraud schemes by which they reported being attacked were a money or gift card scam (46%), smishing (43%), phishing (35%) and vishing (33%). Smishing is the fraudulent use of text messages aimed at tricking the recipient into revealing personal data, while phishing refers to the same practice via email, websites, social posts or QR codes, and vishing by phone call.

TransUnion fraud findings are 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 in 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 Jan. 1 to June 30}

^{3 TransUnion TruValidate data}

^{4 TransUnion Consumer Pulse Survey}

The solution, available to TransUnion’s CreditVision customers, uses alternative data to give lenders deeper insights and a more complete customer picture, improving the risk predictability of consumers and small businesses who have little or no credit risk profiles by up to 25%.

Credit scores are values derived from formal credit data that uses statistical methods to help predict a person’s ability to pay back a loan. A credit score can help influence the initial decision to lend, the size and term of the loan a consumer or small business can afford and can even play a role in determining the interest rate charged by the lender.

Consumers that have no or low credit scores often face obstacles in accessing lifestyle improvements made possible by credit, including unsecured products like clothing accounts or personal loans, or secured products like vehicle finance or home loans. Emerging small enterprises with no credit score may also struggle to access the capital injections they need to grow their business and employ more people.

Although 70% of South Africa’s population has access to a transactional bank account, usage is low, with 27% of people withdrawing all their money as soon as it is paid to them.[1] These, and other factors, all contribute to low levels of financial inclusion and use of credit. No or low credit scores, or ‘thin file’ records, where a consumer or business has little or no credit history, are a barrier the telecommunications (telecoms) alternative data initiative between TransUnion and Chenosis is designed to overcome.

 “One of the major impediments to further financial inclusion and greater credit opportunities is the absence of reliable credit and other information on individuals and enterprises that have not traditionally used banking and insurance services,” said Lee Naik, CEO of TransUnion Africa.

“For example, telecoms data can be used to improve access to credit services by bridging the information gap between traditional credit information and the data generated by consumers and entrepreneurs when they use their mobile phone, or they buy data either pre-paid or on a post-paid contract. This and other information gives us a record of their ability to make regular or semi-regular payments and can help demonstrate the ability to afford monthly credit repayments,” he added.

When a lender requests a consumer’s telecom data, the request is processed via the Chenosis API, which sends a detailed SMS to that consumer, requesting permission to share the relevant data with the inquiring party. Once the consumer has agreed to the request, Chenosis retrieves the consumer’s data, and shares it, within the requirements of protecting personal information.

Telecoms data is already used by mobile operators to assess a user’s risk when considering upgrading a customer from a prepaid account to a post-paid account – with the collaboration between the three industry leaders now making it possible to include this information in a credit score.

Telecoms data can provide insights into a consumer’s current and likely behaviour in various ways. For example, a person’s calling behaviour may provide insights into their comparative ability and willingness to repay debt. Initiating larger numbers of calls rather than receiving them, and making of calls of long duration, are used in some data models as supporting a higher credit score.

Customer and billing records offer direct financial data. For pre-paid subscriber accounts, the size and frequency of top-ups and the choice of plan selections illustrate the user’s financial profile, with some similarities to top-ups of mobile money accounts.

A user who carefully manages his or her prepaid account balance over time to permit smoother usage may be a more responsible borrower. Similarly, where a customer’s service usage patterns follow a monthly cycle, he or she may be more likely to be earning a salary.

“Chenosis is excited to support TransUnion’s drive to provide more access to Financial Services for traditionally underserved sectors in South Africa, Rwanda, and Zambia. This use case exemplifies the power of APIs to facilitate consented data between parties in a secure, authorised, authenticated manner with a clear governance framework to maintain data privacy,” said Saad Syed, CEO of Chenosis. “We believe this is just the beginning of our partnership with TransUnion and hope to jointly build an API ecosystem which will solve problems and create opportunities for consumers and businesses by providing a platform to securely exchange data and services.”

“This strategic partnership with Chenosis, using CreditVision Link, is one way that TransUnion is furthering financial inclusion in sub-Saharan Africa,” Naik added. “We are continuously seeking ways to expand our database to include alternative scoring partners to our bureau data, to more accurately represent more consumers and small enterprises, supporting them in gaining access to the financial services they need to achieve their goals and access new opportunities.”

^{[1] Improving financial inclusion in South Africa - BCG | GIBS}

According to the TransUnion Consumer Pulse Study for Q2 2023, millennials (born between 1980-1994) and Gen Z (1995-2012) are seeing the biggest increases in their incomes, mainly due to new business ventures and wage rises. Nearly four in 10 (37%) are using that additional money to repay their debts, and a quarter (25%) of Zambian households are working to boost their emergency savings.

Part of the reason for this prudent approach is that nearly four in 10 (39%) Zambian consumers are expecting increased financial obligations, which will cause nearly half (49%) of consumers of all ages to cut back on their discretionary spending and four in 10 (40%) to limit large purchases in the next three months.

This cautious outlook on future expenditure suggests that Zambian consumers are prioritising financial responsibility, indicating a noteworthy shift in spending habits, says Weihan Sun, Director of Research and Consulting at TransUnion Africa.

Respondents are taking different approaches to managing debt and loans in times of financial uncertainty. Of those unable to pay their bills in full, 43% choose to pay off their debts in instalments. Close to a third are prepared to dip into their savings to meet their financial commitments, while 29% are considering borrowing from friends and family.

The survey also highlighted a decline in access to credit and consumer confidence in the credit market. Nearly all consumers (96%) believe access to credit is crucial. However, less than a third (30%) said they have adequate access to credit, and six in 10 (62%) do not plan to apply for new credit or refinance existing loans, with rising interest rates as a contributing factor. In May, Zambia’s central bank increased its key lending rate to 9.5% from 9.25% as it battles inflation. 

For those planning to engage with credit (38%), personal loans are the product of choice (41%), followed by refinancing personal loans (25%) and new student loans (22%).

Managing financial choices

Most consumers (94%) acknowledge the significance of credit monitoring, and the survey indicates that more than half of consumers (53%) regularly check their monthly credit reports. However, Sun says it is ‘concerning’ that 30% of consumers do not monitor their credit reports. This highlights the need for more education and tools to support regular credit monitoring.

Opinions were mixed around the question of whether consumers believed their credit scores would improve if businesses used alternative data sets not included on a standard credit report, like rental payments, gym membership dues and short-term loan histories. While a significant proportion (47%) believed their scores would improve, a smaller number (15%) expected no change, and 7% predicted a decrease. Almost a third (31%) needed clarification on the impact, suggesting that educating consumers on the potential benefits of alternative data is important.

Only 28% of Zambian consumers conduct more than half of their transactions online, indicating a continued reliance on traditional methods. This presents a significant growth opportunity for digital channels.

Identity risks and usage

Digital fraud attempts remain a pressing issue for Zambian consumers, with 76% of those surveyed reporting that they had been targeted by such schemes in the last three months. Unfortunately, 9% were targeted and fell victims.

The most common types of fraud schemes included money/gift card scams (46% of respondents), 'smishing' (fraudulent text messages aimed at tricking the recipient into revealing personal data; 43% of respondents), and phishing or vishing scams (one in three consumers). Smishing was reported most frequently by Millennials and Baby Boomers, with the latter also reporting a higher occurrence of vishing attempts, at 56%.

As a result, Zambian consumers are highly concerned about the security of their personal information, with 95% expressing apprehension about sharing their personal details. The data highlights the crucial importance of trust and robust cybersecurity measures in financial transactions and interactions.

“Overall, it's clear that consumers are increasingly aware of the risks associated with digital fraud. With rampant scams, consumers are cautious about sharing personal information, fearing privacy invasion and identity theft. This indicates a significant need for stronger security measures and robust fraud prevention strategies in the digital space,” said Sun.

Consumers can get their free annual credit report from TransUnion here.

Additionally, 36% of targeted Zambians experienced attempts to lure them into money mule scams, where they were solicited to transfer or move illegally acquired money on behalf of someone else.

During the same time, 35% of targeted Zambians experienced ‘phishing’ attempts, where fraudulent emails, websites or social posts attempted to steal their data, while 31% experienced ‘vishing attempts, where fraudulent callers tried to get them to reveal personal information.

However, the top types of digital fraud which Zambian consumers were most worried about differed from the attempts reported. Two-thirds of Zambians (67%) were concerned that their accounts would be taken over and used without their permission, 64% feared identity theft, and 63% were worried about third-party seller scams on legitimate online retail sites.

Data in the 2023 State of Omnichannel Fraud Report blends proprietary insights from TransUnion’s global intelligence network and a specially commissioned TransUnion consumer survey in 18 countries and regions globally.

The study showed that globally, 4.6% of all digital transactions were suspected to be fraudulent. This percentage is in line with the rates found in 2019. However, despite the similarities to the percentage prior to the pandemic, due to the marked rise in number of digital transactions in the last few years, the total volume of all suspected digital fraud attempts has increased dramatically. Globally, such attempts have increased by 80% from 2019 to 2022.

Mildred Stephenson, chief executive officer at TransUnion Zambia, said: “The explosion of digital transactions, the accelerated adoption of digital technologies, and increasing appetites for faster access to funds and credit, have led to an increase in fraud losses, particularly in digital channels. Consumers are expecting organisations to protect their identities and online accounts, and those companies that do not adequately honour those preferences may lose business as a result.”

“Zambian businesses need to take proactive steps to protect themselves and their customers. This means ensuring that identity proofing and authentication is up-to-date and as robust as possible.” 

Of Zambian consumers surveyed, 75% said they had been targeted by an email, online, phone call or text message fraud scheme and 12% of those fell victim. Nearly one-third (32%) of the Zambians that had discovered that they were victims of fraud placed a freeze on their credit accounts, while 26% called the police.  

Stephenson continued: “Rates of digital fraud attempts by sector tend to change rapidly, as fraudsters innovatively shift focus to where there are new opportunities to make financial gain. They will be agile in targeting consumers and organisations as Zambia navigates this current period of global economic uncertainty.

“At TransUnion, we help businesses across a wide range of industries prevent fraud by using intelligent predictive solutions to deliver better experiences – helping to outflank those who would take advantage otherwise and reassure customers that their personal data will not be compromised.”

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as 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.

For more information and insights about our global fraud trends, please download the report here.

These findings are based on intelligence from billions of transactions contained in TransUnion’s TruValidate™ fraud analytics solution suite. The analysis also determined that the average number of suspected digital fraud attempts on any given day during that holiday period globally was 82% higher than during the rest of the year (January 1, 2022 to November 23, 2022). For transactions originating in Zambia, this percentage was 30% lower than during the rest of the year, but 104% higher than the same period in 2021.

The study also revealed the share of suspected digital fraud attempts for each individual day in the holiday shopping period for transactions in Zambia and globally. 

Breakdown of Risky Transactions During Holiday Period

“Fraudulent activity tends to be particularly prevalent in online retail during the holiday shopping season,” said Shai Cohen, senior vice president and head of global fraud solutions at TransUnion. “Despite the fact that consumers have begun returning in larger numbers to in-person shopping in the post-pandemic era, online retail continues to be the preferred means of holiday shopping for many. It’s important that online retailers ensure consumer security and privacy protections, which is important to consumers, but in a way which ensures a seamless shopping experience that minimises unnecessary friction.”

TransUnion also revealed in the analysis the top types of fraudulent e-commerce transactions globally. This year, promotion abuse (user abuses site promotions such as refer-a-friend, free giveaways, etc.) and account takeover (someone other than the owner of an account uses it without permission, indicating that the account has been maliciously compromised) were the top types of digital fraud in retail.

“Online retailers must equip themselves with the proper tools to detect fraud at the first warning sign, and without inhibiting the consumer journey,” said Mildred Stephenson, chief executive officer TransUnion Zambia. “It’s more important than ever that these online retailers implement holistic fraud solutions that are able to verify customer identity and authenticity at the very beginning of a transaction without resulting in false positives that may cost them legitimate transactions.”

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 insights, digital insights, omnichannel authentication, and fraud analytics solution suite – TruValidate™.

To find out how this data varies by select countries, download TransUnion's holiday fraud trends infographic.

 ^[1] 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.

With Zambia’s financial sector showing real signs of growth, with a steady inflow of investment and a growing number of fintech startups looking to disrupt the industry, more consumers than ever are looking for financial services products, says Samuel Tayengwa, Head of Product, Africa Regions for TransUnion. This poses the challenge to companies to reach, verify and onboard new customers at a time when issues like financial inclusion and expansion are more topical than ever.

“The move to digital has changed the way financial services institutions connect with their customers. It also offers new opportunities to acquire customers more easily and cheaply. To enable this, the ability to onboard customers remotely, and to reduce friction and costs at acquisition stage while maintaining security, is going to become critical for most entities,” said Tayengwa.

As the world moves online, the challenge of fraud looms large. According to TransUnion’s latest quarterly analysis of global online fraud trends, fraudsters continue to attempt scams against businesses and consumers. TransUnion’s quarterly fraud analysis found the rate of suspected fraudulent digital transactions against businesses worldwide decreased 14% between Q2 2021 and Q2 2022 but some industries were targeted more than others.

In Zambia, the rate of suspected digital fraud attempts declined marginally by 2% in the same period. For transactions originating from Zambia, the gambling industry saw the biggest growth in the rate of suspected digital fraud attempts with an increase 44% year-over-year. The industry with the second biggest increase was retail, which rose 17% during that same period.

That brings with it the challenge for Zambia’s businesses to protect themselves and their customers from fraud, while continuing to provide a seamless customer experience.

“As we accelerate the shift to transact online, fraud is shifting digitally as well. Zambia’s businesses must give their customers the smoothest possible onboarding experience on digital channels, but historically fraud detection and prevention solutions have negatively impacted that experience,” said Tayengwa.

According to analysis from research and advisory firm Forrester conducted on behalf of TransUnion*, more than half of financial services firms see their identity verification methods as burdensome on good customers. Forrester found this leads to customers abandoning new financial product applications before completion.

To help solve this problem, TransUnion in Zambia has launched Digital Onboarding, a new solution to help the financial services industry provide consumers with a simpler digital application and onboarding experience.

Digital Onboarding helps businesses offer greater digital access to products and services, while addressing an increase in attempted fraud that can come with a rise in digital transactions. It delivers a friction-right experience that includes combining digital and physical identity establishment and verification, while increasing conversions and loyalty, reducing fraud, and improving operational efficiencies. The service is delivered via a single API that significantly reduces integration time and effort for financial institutions.

“Until now, the focus across industries has been on identifying more of the good transactions and customers to allow them to pass with less friction,” said Tayengwa. “Strong fraud and authentication practices decrease false positives and focus fraud-fighting resources on the minority of interactions that warrant scrutiny. By reducing the pool of manual reviews and customer interrogations, organizations can dramatically reduce costs, increase revenue, and improve the overall customer experience.”

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, please download the infographic.

* ^{TransUnion commissioned Forrester to complete a number of research studies August/September 2018 including a look at “Fraud Detection and ID Verification in Financial Services”}

The rate of digital fraud originating from Zambia decreased in Q1 2022, with suspected online fraud attempts declining -13.4% 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 Zambia, there were significant shifts year-over-year (YoY)  within certain industries.

Sectors such as financial services and retail saw YoY decreases in the suspected attempted digital fraud rate from Zambia. Conversely, fraudsters in Zambia increased their suspected scams in sectors such as communities (i.e. online dating), gambling, and travel and leisure.

“What we observed in Zambia 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 Zambia, but Some Industries See Growth

The financial services industry saw the largest YoY decrease in the suspected fraud attempt rate for digital transactions coming from Zambia, at -51.0%. When digital fraud in financial services did occur, TransUnion found the most dominant type in that industry globally was first party application fraud. That’s when an individual completes fraudulent applications that contain intentionally inaccurate or manipulated information with the intention of receiving a lower rate or better terms for a policy or contract.

Fraud attempts, with 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 communities industry exhibited the greatest YoY growth in the rate of suspected digital fraud coming from Zambia in Q1 2022 at 114.5%, with the most prevalent type of fraud globally being profile misrepresentation, where users post inaccurate information in profile or use bogus profile photos.

Gambling showed the second highest increase in Zambia at 66.3%, with the most prevalent type of fraud globally being promotion abuse – where a user abuses site promotions such as refer-a-friend, reload deposit bonuses and free giveaways.

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

“As digital fraud rates stabilise in Zambia 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 to 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.

The effects of the pandemic saw the Zambian economy shrink by 4.2% in 2020, with significant implications for consumers. Many jobs have been lost, and the savings of households have come under severe pressure, reducing their resilience to future shocks. Inflation remained in double digits throughout 2020, averaging 15.7%, and reaching a high of 22.2% in February 2021. A gradual recovery is expected, with GDP growth projected at 1.8% in 2021 and averaging 2.8% over 2021–23.^[1]

TransUnion’s analysis shows the recession has had a major impact on Zambia’s lending industry. The report reveals a 15.8% drop in the number of active accounts between Q1 and Q2 2021, from 1.9 million to 1.6 million, largely because of more paid-up and written off accounts.

While the microfinance sector remained active, with marginal growth in terms of new accounts opened (0.2% growth in Q2 over Q1), the total amount disbursed and average lending limit remained relatively low. The average lending limit for accounts opened in Q2 2021 was ZMW7130, which went down by 4.9% from Q1.

The FinTech sector saw a 39% decrease in the number of active accounts from Q1 to Q2 2021, but still held nearly three in four (74.4%) of loan accounts in the market. However, this only represents 3.9% of the total disbursed amount, with the lending average decreasing from ZMW397 in Q1 to ZMW394 in Q2.

The number of new accounts opened in the banking sector also declined. Between Q1 and Q2 2021, the number of accounts decreased by 29.3%. However, principal values went up by 8.4%, and lending average went up from ZMW151,000 to ZMW154,000 per account. As a result, the sector held a balance of ZMW24.1 billion, which was around 60.8% of the value of all loans. This shows banks have reduced the number of accounts being opened but increased the lending limit, leading to an increase in the current balance.

TransUnion Africa’s director of product, Samuel Tayengwa, said the impact of COVID-19 would continue to dampen economic activity, especially in sectors like tourism, retail and wholesale trade, and that a return to macroeconomic stability would largely depend on progress on debt restructuring, fiscal consolidation efforts and the availability of COVID-19 vaccines.

“The lending sector experienced a continued reduction in demand and supply for credit in Q2 2021, with high inflation rates, coupled with a rapidly depreciating currency, tipping many Zambians into financial hardship,” said Tayengwa.

The TransUnion report also observed that the non-performing loan (NPL) ratio had increased, largely because of the effects of the COVID-19 pandemic.^[2] Over the past three years, the NPL ratio for banks fluctuated from 9.5% in 2018, to 8.2% in 2019, to 12.6% in 2020. Overall, this represents a significant reversal of the gains made in prior years.

“For many businesses, the COVID-19 crisis has prompted an accelerated transformation to new technologies and new ways of working. To compete in this changing environment, lenders need to reimagine the role of lending in the economy and adjust operations to suit current circumstances,” said Tayengwa.

“This means lending institutions must understand the emerging needs in different portfolio segments and then decide how to satisfy them efficiently and effectively. Customer segmentation and data analytical insights will be critical for lenders to make informed decisions, and risk-based pricing will become an industry standard in this new credit landscape.”

Tayengwa also observed that lenders will require deeper insights into their customer base and general market trends to develop and implement appropriate pricing strategies across products and consumer segments. He also stressed how important it was to focus on identity verification, fraud prevention and collections solutions that can assist in managing risk and optimising growth throughout the portfolio.

“Lenders that fail to evolve their ecosystem and take a more insight-led approach to customer segmentation will be the ones less able to recover from the impacts of COVID-19. Digital lending platforms allow lenders to automate the decision-making process and assess risk more accurately while creating a superior customer experience. A single integrated digital lending platform ensures lenders can run the customer application through background checks and verifications instantly, and auto-decisioning ensures customers can get a response almost immediately,” said Tayengwa.

Molefe, the former executive director for South Africa & Rest of Africa for content and technology solutions provider LexisNexis, replaces Chad Reimers, who moves to a new position within TransUnion’s wider global business. Molefe will take responsibility for business development, stakeholder and regulatory engagement, and overall operations in seven countries in East and Southern Africa*.

Lee Naik, the chief executive officer of TransUnion Africa, said TransUnion’s wider Africa capability was ‘a critical part’ of the company’s portfolio growth strategy, and that he was looking forward to extending its offering under Molefe’s leadership.

“Thabo has extensive experience in growing markets across Africa and has a proven track record of high-level stakeholder engagement. We’re confident that he will be able to position TransUnion’s global information and insights capabilities to take our business to the next level in these key markets,” said Naik.

Molefe, who took up his new role on 24 August 2020, has deep knowledge of the African marketplace, having operated across the continent in a senior capacity for almost 20 years. He has previously fulfilled leadership roles at both LexisNexis and technology giant HP.

“TransUnion’s breadth and depth of data insights, and range of information solutions, are unmatched in this industry. I joined the company because I believe it has the potential to help even more African businesses make more informed decisions, and African consumers better manage their personal information and gain access to financial products and services,” said Molefe.

“I’m looking forward to deepening our relationships with clients, consumers and wider stakeholders, and helping the financial and digital lending communities establish trusted relationships and deliver great experiences and help create more economic opportunities.”

*_{Outside of South Africa, in East and Southern Africa TransUnion has operations in Kenya, Rwanda, Zambia, Namibia, Botswana, Eswatini, and Malawi.}

Cashless solutions like mobile lending and digital payments were already growing rapidly on the continent even before the pandemic struck. Now, we could see a scenario where the effects of COVID-19 on our society will create permanent changes in the way Africans use cards and cash, creating both opportunities and challenges for financial institutions, said Mildred Stephenson, CEO at TransUnion Zambia.

“Even in 2020, millions of people across sub-Saharan Africa still pay their bills and send money each month by drawing cash and physically going to a retailer or a bank to make payment or to receive grant payments. Now, their safety concerns mean they don’t want to make physical payments anymore, which means banks and FinTechs will have to rapidly roll out safer, contact-free payment methods,” said Stephenson.

As markets prepare for life beyond the pandemic, digital transformation is becoming a key strategic initiative for financial institutions across both digital and traditional channels. Financial services providers will need to focus on offering payment and lending solutions, and onboarding customers, digitally in a seamless, easy and secure manner.

They are increasingly being supported by economic policy changes from regulators, government institutions and banks. The Central Bank of Zambia has put in place a range of measures, including waiver of charges on e-money transactions of up to K150 by all electronic money issuers. In addition, commercial banks are urged to waive transfer fees on electronic money transactions.

As growing numbers of consumers and businesses transact online, one of the biggest obstacles to the mass uptake of digital solutions will be security, says Stephenson. TransUnion’s quarterly analysis of global online fraud trends found that the telecommunications, e-commerce and financial services industries have been increasingly targeted by online fraud, with the number of suspected fraudulent digital transactions increasing by 5% comparing the periods Jan. 1-March 10 and March 11-April 28 (March 11, the mid-date, was the date the World Health Organization (WHO) declared the coronavirus (COVID-19) a global pandemic). TransUnion identified more than 100 million suspected fraudulent transactions globally from March 11-April 28 alone.

This will mean banks and businesses will need to deploy robust identity verification and fraud detection tools to manage their risks and avoid losses at a time when demand for credit is growing. At the same time, they must ensure a smooth customer experience that does not alienate the customer before they have even onboarded.

“Now that even more transactions have shifted online, fraudsters are trying to take advantage and companies must adapt. Lenders and businesses need to know exactly who they are dealing with, and how to protect their genuine customers from fraudulent activities. The businesses that come out on top will be those leveraging fraud prevention tools that provide great detection rates, and providing the ability to open accounts online in an easy, personalised way,” said Stephenson.

Rather than asking customers to manually enter their personal information, for example, ID documents can be validated online, and the information used to pre-fill an application. Once ID is established, the next step is effective ID Verification to detect and prevent fraud. Digital transactions carry an increased risk of fraud that businesses need to address through a multi-layered fraud strategy including assessing risk of digital signals like device, email, phone and behaviour.

After ID management and fraud risk and prevention steps are taken, the final steps in a seamless onboarding experience include assessing the consumer’s ability to pay, based on actual or estimated income and credit history.

“COVID-19 has put immense pressure on African financial institutions to transform digitally, and to do this, they will need access to the most comprehensive set of offline and online data assets. Providing a truly seamless onboarding process requires up-to-date data sourced from credible data sources like credit reference agencies/bureaus, government agencies, telcos and utility providers. This is where information providers like TransUnion are playing an increasing role in driving digital transformation, access to credit and financial inclusion,” said Stephenson.