Suspected Digital Fraud Attempts from Hong Kong Decreased 26% YoY as Businesses Take Control Against Fraudsters
- Biggest declines in gaming, communities and retail sectors, while gambling and financial services show small increases
The rate of suspected digital fraud attempts from Hong Kong in Q2 2022 has decreased 26% compared to the same period last year, which is a significant drop compared to the 14% decline shown globally. TransUnion’s (NYSE:TRU) quarterly fraud analysis showed that the rate of suspected digital fraud attempts originating from Hong Kong declined across almost all of the industries tracked except for the gambling (2%) and financial services sectors (2%), with the largest declines in gaming (-59%), communities (-48%), and retail (-46%).
TransUnion’s data on fraud against businesses is drawn 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 reviewed and/or denied due to fraudulent indicators compared to all transactions that were assessed for fraud.
“Over the past two years we’ve generally seen rates of digital fraud increase as consumers increased their use of digital channels. However, it’s good to see the digital fraud rate for transactions originating from Hong Kong decrease the last couple quarters which could show that businesses are taking effective preventive measures against digital fraud,” said Jerry Ying, chief product officer of TransUnion APAC. “We’ve known for a long time that fraudsters follow the money and target where it is being spent. With people staying at home more during the pandemic, illegal online gambling helped fill the entertainment void for many consumers, which is particularly prone to fraudsters’ attention and has been a consistent tendency. At the same time, another pandemic trend has been consumers being more conscious about savings, investments and household finances. The data shows that these sectors remain a target for fraudsters.”
Year-over-Year Growth Rates of Digital Fraud Attempts (from Q2 2021 to Q2 2022)
Travel and Leisure
Communities (online dating, forums, etc.)
TransUnion’s most recent quarterly Consumer Pulse Survey findings mirror the downtrend in digital fraud attempts coming from Hong Kong. Among 1,006 Hong Kong adults surveyed from May 25 – June 15, 2022, almost one-third (32%) said they had been targeted by digital fraud in the last three months, down six percentage points from Q1 2022. Among those targeted, phishing scams (41%) remain the most common type of digital fraud, followed by money/gift card scams (21%) and stolen credit card/fraudulent charges (21%).
Fraud Rates Fall Faster in Hong Kong Compared to Global Trends
TransUnion’s latest quarterly fraud analysis shows that the largest declines year-on-year (YoY) in the rate of suspected digital fraud of transactions originating from Hong Kong occurred in gaming (-59%) and communities (-48%) followed by retail (-46%), and travel and leisure (-35%). Rates of decline in communities, retail, and travel and leisure are ahead of the global figures (-8%, -28% and -28%, respectively) whereas declines in gaming were slightly less severe than the global trend (-63.5%).
Looking at the longer-term trend, the rate of digital fraud for transactions originating in Hong Kong against online communities is up 124% in Q2 2022 compared to the same quarter two years ago. Although fraud in financial services showed a slight YoY increase in Q2 2022, rates are actually down 4% compared to two years ago.
“The focus across industry has been identifying more of the good transactions and allowing them to pass with less friction,” said Jerry Ying. “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, organisations 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.