Digital Fraud from Hong Kong Drops During Pandemic — Unlike Rest of the World

TransUnion (NYSE: TRU) has released its quarterly analysis of online fraud trends in Hong Kong. It found the percentage of suspected fraudulent digital transactions originating in Hong Kong fell recently despite a rise globally and that the age group most targeted by online COVID-19 scams in Hong Kong are millennials.

This quarter TransUnion analyzed fraud trends against businesses to reflect the changing economic environment with COVID-19. It used March 11, 2020 – the date the World Health Organization (WHO) declared the coronavirus (COVID-19) a global pandemic – as a base date for its analysis. TransUnion determined that there was a 10% drop in the percent of suspected fraudulent transactions originating in Hong Kong when comparing the periods of Jan. 1-March 10 and March 11-April 28. Globally, TransUnion found the percent of suspected fraudulent digital transactions rose 5% when comparing the same periods.

“Given the billions of people globally that have been forced to stay at home, industries have been disrupted in a way not seen on this massive of a scale for generations,” said Shai Cohen, senior vice president of Global Fraud & Identity Solutions at TransUnion. “Now that many transactions have shifted online, fraudsters have tried to take advantage and companies must adapt. Businesses that come out on top will be those leveraging fraud prevention tools that provide great detection rates and friction-right experiences for consumers.”

Examining Fraud Types and Their Impact on Industries

TransUnion analyzed industries being targeted to determine the percentage change in suspected fraud against them, comparing the periods of Jan. 1-March 10 with March 11-April 28. The analysis found Hong Kong digital fraudsters targeted telecommunications and financial services companies the most – very similar to the global findings.

Suspected Fraud Post-Pandemic Declaration

“While suspected online fraud from Hong Kong decreased overall, the industries where we saw increases were significantly higher than in those sectors globally – showing us that fraudsters in Hong Kong were much more laser focused on targeting specific businesses,” said Marie Claire Lim Moore, CEO of TransUnion Hong Kong. “On a global level, our data shows that fraudsters are targeting the more digital forward industries with more financial transactions that are faring relatively well business-wise during the pandemic.”

Consumers Targeted By COVID-19 Schemes

To better understand the impacts of COVID-19 on consumers, TransUnion surveyed 9,215 adults in the U.S., Canada, Colombia, Hong Kong, India, South Africa and the U.K. during the week of April 13. In Hong Kong, three out of 10 respondents (30%) said they had been targeted by digital fraud related to COVID-19, with Millennials (those persons between the ages 26-40) being the most targeted at 36%.

“A common assumption is that fraudsters target older generations who are perceived to be less digitally capable,” said Lim Moore. “Our data showed the opposite, with over a third of Hong Kong Millennials saying they had been targeted by digital fraud, compared to just over a fifth (22%) for Baby Boomers (ages 56-76). Adding insult to injury, our survey found Hong Kong Millennials are one of the groups being financially challenged the most during the pandemic.”

Methodology

For its transactional data, TransUnion analyzed the billions of online transactions by its flagship fraud and identity solution, TransUnion IDVision® with iovation®, assessed for fraud indicators for more than 40,000 websites and apps. It compared the percent of suspected fraudulent transactions it saw from Jan. 1-March 10, 2020 to those from March 11-April 28, 2020.

For a hub of relevant educational resources aimed to help fight fraud during this time, go to the TransUnion Global Fraud & Identity Solutions COVID-19 resource center.