• Amongst businesses, almost one quarter (24%) of Hong Kong respondents identified fraud as the top risk with the greatest potential impact on their organisation
• Third-party fraud (25%), account takeover (24%) and scam or authorised fraud (21%) were the top three causes of fraud losses reported by business leaders
• More than half (55%) said their customers had been victimised by caller ID spoofing according to business leaders, while 37% of consumers reported being targeted with digital fraud in a recent three-month period

Insights from TransUnion’s (NYSE: TRU) H2 2026 Update to the Top Fraud Trends Report reveal that identity and trust has become the new battleground in Hong Kong’s evolving fraud landscape. Fraudsters increasingly exploit the trust consumers place in familiar communication channels to gain access to identity data. Once identity information is compromised, artificial intelligence (AI) and automation enable fraudsters to turn it into more convincing, scalable and personalised attacks, further challenging businesses’ ability to determine whether an identity or interaction can be trusted.

The evolving nature of fraud continues to expose Hong Kong businesses to considerable financial losses according to a survey conducted by TransUnion of 1,600 business leaders across eight markets — Hong Kong, Brazil, Canada, India, the Philippines, Spain, the United Kingdom and the United States. Among the 200 Hong Kong respondents, they reported their companies lost an equivalent of 5.1% of annual revenue on average due to fraud in the past year.

Given the scale of these financial losses, Hong Kong businesses clearly recognised fraud as a significant threat. Almost one-quarter (24%) of surveyed business leaders identified it as the risk with the greatest potential impact on their business, making it the greatest risk type. When asked which fraud has been the predominant cause of losses in the past year, third-party fraud (use of stolen identities to open accounts) was the top answer at 25%. This was followed by account takeover (unauthorised individuals take over someone’s online account) at 24%, and scam or authorised fraud (a dishonest scheme intended to deceive a person into giving up something of value) at 21%. While these fraud types take different forms, each exploit identity or trust as a point of vulnerability.

Identity-Based Fraud Accelerates as Trusted Communications Channels and Data Breaches Fuel Risk

This exploitation is increasingly evident across different communication channels. More than half of Hong Kong businesses reported that their customers had been victimised by caller ID spoofing, where fraudsters deliberately falsify the caller identity to impersonate trusted organisations or individuals, at 55%. This was followed by SMS spoofing at 54% and email spoofing at 48%.

Consumers’ experiences further demonstrate how frequently fraudsters use familiar communication channels to target personal information. According to TransUnion’s Consumer Pulse Study for Q3 2026, more than one-third (37%) of Hong Kong consumers reported being targeted by fraud through email, online platforms, phone calls or text messages between April and July 2026. Among those who said they were targeted, the top scheme they reported was vishing at 36%.

Beyond personal information obtained through trusted communication channels, data breaches also continuously feed the identity-based fraud supply chain. This exposure is already affecting Hong Kong consumers, with one in five (20%) reporting that they had been notified of their identity or account information being exposed in a data breach between April and July 2026.

As more genuine identity information becomes available, fraudsters can use AI tools to create increasingly convincing synthetic identities, where real and fabricated information are merged to form a fictitious identity for the purpose of illicit activities. This growing sophistication is reflected in the experience of Hong Kong businesses, with almost one-third (32%) of business leaders reporting that synthetic identity fraud had increased by more than 25%. Looking ahead, when asked which fraud types they expect to grow the most over the next 12 to 24 months, 68% ranked synthetic identity among their top three concerns. However, over half (54%) said their organisations were least prepared to manage this type of fraud.

“Fraud in Hong Kong is increasingly an identity and trust challenge. Fraudsters are exploiting trusted communication channels to gather personal information, which can then be combined with AI and automation to create more convincing, scalable and personalised attacks,” said Devon Sin, chief product officer at TransUnion Asia Pacific. “As fraud evolves, verifying an isolated identity at a single point in time is no longer enough. Businesses need a more holistic view of trust by combining identity, behavioural, device and network intelligence to better distinguish genuine consumers from increasingly sophisticated fraud across the consumer lifecycle.”

Business Face Growing Difficulties Distinguishing Genuine Customers from Fraudulent Ones

As more identity information is exposed, fraudsters can feed this data into AI tools to create sophisticated synthetic identities and deepfake documents, making traditional ways of identity verification increasingly difficult. The scale of this challenge is reflected in the report, in which 97% of Hong Kong respondents expressed concern that fraud risks are evolving faster than their businesses’ ability to detect and prevent them. Hong Kong is also stepping up efforts to address AI-enabled fraud. In its 2026 Policy Address¹, the government outlined plans to regulate deepfakes and remove online content that may constitute financial fraud, as concerns grow over the misuse of AI technologies.

The increasing sophistication of AI-assisted identity fraud is also placing greater operational pressure on businesses. Almost half (45%) of the Hong Kong business leaders surveyed reported spending over 30 minutes manually reviewing each individual transaction for potential fraud, while one in five (20%) said that a quarter or more of manually reviewed account applications were ultimately legitimate customers. The findings lend support to resource strain, with almost all (97%) of respondents reporting fraud has led to increased operational costs for their business.

“The rise of AI-assisted fraud is making it increasingly difficult for businesses to distinguish genuine customers from fraudulent ones. As fraud becomes more sophisticated, organisations face growing operational pressure to investigate suspicious activity while maintaining a seamless customer experience,” added Sin. “Identity has become one of the most valuable assets for fraudsters. In an era where fraudsters can increasingly mimic legitimate identities and behaviours, businesses need to look beyond any single signal to make trust decisions. Greater intelligence sharing and a more connected view of risk will be critical to combating evolving fraud, protecting customers and supporting sustainable growth.”

Download the TransUnion H2 2026 Update to the Top Fraud Trends Report for more information and insights about the global fraud trends.

¹ 2026 Policy Address: Combating the use of AI in criminal activities