• 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

• Despite a lower suspected digital fraud rate of 2.8% in 2025 compared with the global figure of 3.8%, Hong Kong showed a contrasting pattern of lower-frequency but higher-severity fraud
• The telecommunications industry exhibited the highest suspected digital fraud rate in Hong Kong in 2025, followed by communities and logistics
• Account login represented the highest-risk stage for attempted transactions in Hong Kong, with a 10.1% suspected digital fraud rate, more than twice the global average

Analysis from the H1 2026 Update to the Top Fraud Trends Report published by TransUnion (NYSE: TRU) found that 2.8% of all attempted digital transactions where the consumer was in Hong Kong were suspected to be digital fraud¹ in 2025, down from 5% a year ago and below the global rate of 3.8%. This  is also reflected in the city’s official statistics, which recorded a modest 2.9%² year-on-year (YoY) decline in fraud cases in 2025, while Q1 2026 also showed a 0.6%³ YoY decrease, possibly supported by continuous public initiatives and broader awareness campaigns, along with more cautious risk management practices adopted across the private sector.

Encouragingly, this progress was also mirrored in consumer sentiment. More than half (53%) of Hong Kong consumers reported that they did not recall or recognise being targeted by digital fraud via online, email, phone call or text messaging from August to December 2025, marking a 10% increase compared with 2024 and above the global figure of 47%.⁴

Hong Kong Showed a Contrasting Pattern of Lower-Frequency and Higher-Severity Fraud

Despite a decrease in the suspected digital fraud rate, 17% of Hong Kong consumers reported financial losses due to digital fraud in the last year, according to a TransUnion survey conducted between November and December 2025 across 18 countries and regions, including 1,000 respondents from Hong Kong. This brings the median fraud loss to US$6,155, equivalent to approximately HK$48,000⁵ – substantially higher than the global median of US$1,671 (approximately HK$13,000⁵), positioning Hong Kong as the market with the highest median fraud loss among all regions surveyed.

Yet this significant financial exposure has not translated into proportionate vigilance. Among those Hong Kong consumers who discovered they had fallen victim to fraud, fewer than half (46%) said they called the police, and only 42% indicated they placed a fraud alert on their credit report. This gap between the magnitude of the threat and limited mitigation or remedial actions taken underscores the importance of fostering more proactive consumer behaviours to strengthen individual defences against fraud and minimise the impact after falling victim.

Telecommunications, Communities and Logistics Emerged as Top Targets for Suspected Digital Fraud

In 2025, the telecommunications industry recorded the highest suspected digital fraud rate at 5.8% for attempted transactions where the consumer was in Hong Kong, notably exceeding the global average of 4.2% and representing a 56% YoY rate surge. These figures highlight the heightened risk facing the telecommunications sector, as fraudsters increasingly leverage telecommunications networks, mobile services and high-volume digital transactions to carry out fraudulent activities.

The elevated risk aligns with findings from the Anti-Deception Coordination Centre (ADCC) ⁶. In 2025, scams involving impersonation of a telecommunications service provider staff were reported, with fraudsters using stolen personal data, including names and HKID numbers, to fabricate credibility and deceive individuals into conducting fraudulent payments.

Meanwhile, the communities’ industry, comprising online dating sites and forums, remained the second-riskiest sector in Hong Kong in 2025 with a 5.4% suspected digital fraud rate, reflecting a trend from the previous year. This was followed closely by the logistics industry at 5%, a figure that significantly exceeded the global average of 1.6%.

"While Hong Kong’s suspected digital fraud rate is below the global benchmark, our study reveals that local consumers report suffering the highest median fraud losses, more than 3.5 times the global level. Despite this, many consumers still overlook essential remedial measures even after recognising they have been fallen victim to fraud," said Devon Sin, chief product officer at TransUnion Asia Pacific. "Fraud risk remains persistent and widespread, especially in the telecommunications industry as mobile usage becomes integral to everyday transactions, opening up more avenues for abuse. Hence, consumers must proactively leverage trusted tools to continuously monitor and safeguard their personal information before fraudsters have the opportunity to strike."

Fraudsters Targeted Early Stages of Consumer Lifecycle, Prompting Reinforced Protection at Every Touchpoint

Vulnerabilities in consumers’ digital lifecycle were particularly prominent during the initial stages. Account logins recorded the highest suspected digital fraud rate at 10.1% in Hong Kong in 2025, more than twice the global average of 4.3%. Similarly, the suspected digital fraud rate during account creation was also high at 9.7%, exceeding the global average of 8.3%. In contrast, financial transaction suspected digital fraud in the city was significantly lower at 0.3%, suggesting that strong security protocols are in place for authenticated users.

The Suspected Digital Fraud Rate of Account Creation and Login in Hong Kong Both Surpassed Global Levels in 2025

Source: TransUnion global intelligence network
 

With account creation and login reported as key points of vulnerability, attacks could involve misuse or manipulation of personal identities. In Hong Kong, such identity-based attacks have been a significant driver of financial losses. In particular, identity theft (personal information like name, address or phone number was stolen in a data breach) emerged as the top reported cause of fraud loss, cited by 34% of Hong Kong consumers who said they lost funds to digital fraud in the last year. This was followed closely by vishing (fraudulent phone calls that induce consumers to reveal personal information) and money mule scams (consumer being solicited to transfer or move illegally acquired money on behalf of someone else), both at 31%.

In response, Hong Kong consumers have become increasingly vigilant and are gravitating towards businesses that guarantee stringent authentication and layered defences. The vast majority (79%) of respondents expressed a preference for accessing online services such as bank accounts with explicit authentication, and 75% favoured keeping multi-factor authentication permanently enabled. When asked which extra security measures they preferred, consumers’ top answers were facial biometrics (19%) and fingerprint biometrics (18%), highlighting a growing trust in advanced technologies.

“Fraudsters continue to zero in on the most vulnerable links in the consumer journey. As fraud tactics become more sophisticated through AI technologies such as deepfakes, consumers are increasingly reliant on businesses to protect them across their entire digital experience, making robust safeguards critical at every stage,” added Sin. “To effectively combat fraud threats – particularly identity theft, one of the most prevalent risks in Hong Kong according to our data – the traditional single-layered approach is no longer sufficient. Businesses must adopt a multi-layered strategy that combines strong and accurate authentication, specialised deepfake detection and reliable identity document verification from the outset. These measures, together with effective device validation and network intelligence, are essential to protecting consumers, strengthening trust and ultimately fostering a safer, more resilient digital economy today.”    

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 the 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, the United States and Zambia. 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 reflect 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 Info.gov.hk: Law and order situation in Hong Kong in 2025 (with photos)

³ Info.gov.hk: Remarks by the Secretary for Security after attending the Fight Crime Committee meeting (Chinese only) (with video)

⁴ TransUnion surveyed 1,000 consumers in Hong Kong from Nov. 20 to Dec. 8, 2025 as part of the global survey of 12,730 consumers in 18 countries and regions.

⁵ Based on the exchange rate on Dec. 29, 2025 when calculated for the report.

⁶ Anti-Deception Coordination Centre: Caution: Three Tricks Employed by Scammers Posing as CMHK Staff

• Hong Kong’s suspected digital fraud attempt rate was 2.7% in the first half of 2025
• The top three predominant causes of fraud losses identified by Hong Kong businesses were third-party fraud, account takeover, and scam or authorised fraud
• Retail exhibited the highest rate and year-on-year (YoY) rate increase in suspected digital fraud from Hong Kong among industries analysed, surpassing all other countries and regions in the study

Insights from the newly released TransUnion (NYSE: TRU) H2 2025 Update to the  Top Fraud Trends Report revealed that 2.7% of all attempted digital transactions where the consumer was in Hong Kong were suspected to be digital fraud¹ in the first half of 2025, lower than the global rate of 3.8%. Compared to a year ago in the first half of 2024, Hong Kong’s suspected digital fraud dropped from 3.8%, indicating positive progress in the city’s efforts to combat fraud.

Despite this improvement, fraud continues to pose significant financial risks to businesses in Hong Kong. According to a business survey conducted by TransUnion, which gathered insights from business leaders across six markets — Hong Kong, Canada, India, the Philippines, the United Kingdom and the United States, 200 Hong Kong respondents reported their companies lost an equivalent of 7.1% of annual revenues on average due to fraud in the past year, representing a total of HK$92 billion. In addition to financial losses, more than half (51%) of respondents said they were extremely or very concerned about the impact of fraud on their businesses, underscoring the continued importance of fraud prevention as a strategic priority.

Hong Kong businesses strengthen fraud defences, but confidence in fraud identification remains subdued

Hong Kong businesses are actively strengthening their defences against fraud. According to the same business survey, three quarters (75%) reported optimising their fraud detection models at least quarterly with 21% doing so monthly. Hong Kong also recorded the highest percentage of business leaders among surveyed markets reporting deploying large fraud operations teams with more than 20 analysts. However, these efforts did not fully translate into confidence, with only 56% of Hong Kong business leaders feeling extremely or very prepared to identify fraud attacks involving multiple channels, placing Hong Kong at the lowest confidence level in the study.

To dive deeper into the root causes of fraud losses, business leaders in Hong Kong were asked to identify the main contributors over the past year. Third-party fraud, involving the use of stolen identities to open accounts, was cited by 26% as the leading cause. This was followed by account takeover (22%), where unauthorised individuals take over someone’s online account, and scam or authorised fraud (18%), a dishonest scheme intended to deceive a person into giving up something of value. These findings indicated a strong prevalence of identity theft and unauthorised access.

Phone fraud emerged as a significant concern for both consumers and businesses

On the other hand, fraud also remained a persistent threat to consumers. According to TransUnion’s Consumer Pulse Study for Q2 2025, more than one-third (37%) of Hong Kong consumers reported being targeted by email, online, phone call, or text messaging fraud from February to May 2025, with 4% falling victim. Among those targeted, vishing (fraudulent phone calls meant to trick consumers into revealing data) was the most common scheme, affecting 32% of respondents.

Hong Kong business leaders have also acknowledged concerns around phone-related threats and reported actively monitoring associated risks, as reflected in TransUnion’s business survey. Close to 80% of business leaders expressed being extremely, very or moderately concerned about phones being compromised or taken over by fraudsters during the transmission of one-time passcodes. Similarly, 43% ranked phone number reputation (phone number attributes that may signal fraud such as type of phone, fraud history and identity linked to it) among their top three most important fraud prevention solutions, the highest among all surveyed markets.

“It is encouraging to see Hong Kong making progress in combating and preventing fraud, as highlighted in TransUnion’s latest Top Fraud Trends Report. However, as fraudsters continue to evolve and adapt, our data also showed that both businesses and consumers remain aware of increasingly sophisticated schemes such as identity-based fraud and phone-related scams,” said Devon Sin, chief product officer at TransUnion Asia Pacific. “To maintain vigilance, businesses must tailor their fraud strategies to local realities, striking the right balance across technology, processes and awareness to stay ahead of complex threats. At the same time, individuals should proactively safeguard and monitor their personal information through trusted tools to reduce vulnerability and stay ahead of evolving risks.”

Fraudsters shifted tactics to exploit vulnerabilities across different sectors

Compared to the first half of 2024, financial services demonstrated encouraging progress in fraud mitigation, with the suspected digital fraud rate for attempted transactions where the consumer was in Hong Kong declining by 21% YoY. The improvements were likely supported by the Hong Kong government's continued efforts in cyber defence and public education². However, fraudulent activities remain persistent in the retail industry — a reminder that fraudsters are constantly seeking vulnerabilities and will not hesitate to exploit emerging opportunities. Sustained vigilance across all industries remains essential.

In the first half of 2025, retail recorded the highest suspected digital fraud rate among industries analysed for transactions where the consumer was in Hong Kong at 19.4%, representing a sharp 155% YoY rate increase. This positioned Hong Kong with the highest suspected digital fraud rate and YoY rate increase in the retail sector among all markets analysed. This trend aligns with official data from the Hong Kong Police Force, which shows that the majority of online scams reported during the first half of 2025 were linked to online shopping and job advertisements³. The telecommunications sector recorded the second highest suspected digital fraud rate from Hong Kong at 8.9%, followed by the logistics sector at 7.9%, with notable YoY rate increases of 128% and 117% respectively.

When it comes to the consumer lifecycle, fraudsters targeted vulnerabilities at the early stages of the digital journey, particularly during account logins (such as login attempts and failed login events). The suspected digital fraud rate during this stage stood at 10.8%, more than double the global average of 4.3%, making it the riskiest stage within the digital journey. In contrast, the suspected digital fraud rate during account creation (3.8%) and financial transactions (0.3%) from Hong Kong remained below the global average, possibly reflecting the city’s stronger onboarding controls and robust payment security.

Suspected digital fraud rate from Hong Kong by industry, retail tops in rate and year-on-year change

 Source: TransUnion TruValidate™

"Fraudsters are highly adaptive. Even as awareness among businesses and consumers grows, cybercriminals continue to search for vulnerabilities across sectors and at every stage of the digital consumer lifecycle," added Sin. "Protecting the organisations and customers is non-negotiable. An enterprise-wide approach that leverages smarter fraud detection and breaks down fragmented systems is essential. Ultimately, strengthening each layer of defense and remaining agile to evolve as fast as fraudsters do will help businesses foster long-term resilience, minimise unnecessary customer friction and set the foundation for a more trusted digital economy."

TransUnion came to its conclusions about digital fraud and data breaches based on intelligence from its array of TransUnion fraud prevention solutions. Specific country and regional data in the report includes 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, the United States and Zambia. Download the TransUnion H2 2025 Update to the Top Fraud Trends 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 to meet 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 represent every country worldwide and not just the selected countries and regions.

2 Hong Kong Monetary Authority: HKMA, HKPF and HKAB jointly announce new measures to strengthen the response to fraud and money laundering

3 HK Government Press Release: Remarks by Secretary for Security at media session after Fight Crime Committee meeting (with video) (only available in Traditional Chinese)

• Hong Kong’s suspected digital fraud rate exceeded the global level for the fifth consecutive year, reaching 6.2% in 2024
• Retail exhibited the highest rate of suspected digital fraud in Hong Kong last year, followed by communities and financial services
• Majority (95%) of Hong Kong respondents expressed concern about falling victim to fraud amid rising online transactions

Insights from the newly released TransUnion (NYSE: TRU) H1 2025 Update to the State of Omnichannel Fraud Report revealed that 6.2% of all attempted digital transactions where the consumer was in Hong Kong were suspected to be digital fraud¹ in 2024, 15% higher than the global rate of 5.4%. This marks the fifth consecutive year that Hong Kong’s suspected digital fraud rate has exceeded the global level since 2020 when TransUnion began research on this metric. The trend highlights vulnerabilities exacerbated by the city's rapid digital adoption and increasingly sophisticated cybercriminal tactics.

More notably, among consumers TransUnion surveyed in 18 countries and regions for the report between November and December 2024, almost one in three (29%) said they lost money due to online, email, phone call or text messaging fraud in the last year. In Hong Kong, 29% also said they lost money due to fraud at an average cost of US$4,332 per person, which was over HK$33,500² in local currency. This figure significantly surpassed the global average of US$1,747 (over HK$13,600²), positioning Hong Kong with the third highest average amount of reported fraud loss across surveyed international markets.

Retail, communities and financial services ranked as the top three industries targeted by suspected digital fraud in Hong Kong

In 2024, the retail industry recorded the highest suspected digital fraud rate at 17.8% for transactions where the consumer was in Hong Kong. It represented a staggering 113% year-on-year (YoY) increase, the largest increase in the suspected digital fraud rate from 2023 to 2024 for retail among all countries and regions analysed. This rapid increase also far surpassed the YoY digital transaction growth of 15% within the sector, suggesting a heightened likelihood of fraudulent activities outpacing overall industry growth.

This trend echoed with local data from the Hong Kong Police Force, which recorded almost 12,800 online shopping fraud cases in 2024, resulting in losses of over HK$356 million, an increase of 43% in cases and 87% in financial losses compared to 2023³, underscoring the pressing need for enhanced safeguards in the retail ecosystem.

The communities industry, which includes venues such as online dating and forums, came close behind with the second highest suspected digital fraud rate in Hong Kong at 17.0%, followed by financial services at 5.4% in 2024.

Although financial services remained among the top three industries most targeted by suspected digital fraud in Hong Kong, this rate has significantly decreased by 18% YoY (down from 6.6% in 2023), even as the number of digital transactions in financial services in Hong Kong increased by almost one fourth (23%). This digital fraud rate decrease may be attributed to various measures implemented by the Hong Kong government, such as the expansion of Suspicious Account Alert for internet banking and physical branch transactions⁴, which has bolstered customer protection against rising fraud risks.

Despite these findings, fraudsters are highly adaptable, constantly evolving their tactics to target unprepared victims. Businesses and consumers must stay vigilant and informed about the latest fraud trends to avoid being deceived. According to the Hong Kong Monetary Authority (HKMA), since local banks implemented measures to combat malware in February 2024⁵, fraudsters swiftly shifted to schemes that trick victims into revealing SMS one-time passwords (SMS OTPs) for ongoing fraudulent activities.

“With the average reported fraud loss in Hong Kong exceeding HK$33,500 — far surpassing the latest median monthly local income of HK$22,000⁶ — the situation certainly needs greater public attention. While combating fraud remains the city’s primary goal, stronger collaboration among regulators, businesses and consumers is essential for effectively mitigate risks. We look forward to seeing more partnerships across various sectors to further enhance our defenses collectively,” said Eric Cheung, head of solution consulting at TransUnion Asia Pacific.

Retail had the highest rate of suspected digital fraud in Hong Kong in 2024, outpacing overall digital transactions growth in the industry

 Source: TransUnion TruValidate™

Hong Kong respondents remained concerned about falling victim to fraud amid increasing online transactions

The TransUnion-commissioned survey also revealed a growing reliance on online transactions among Hong Kong consumers. Close to one in three (32%) respondents reported conducting more than half of their finance, retail and business transactions online, an increase from 27% in 2023. Among generations surveyed (Gen Z, Millennials, Gen X and Baby Boomers) ⁷, Gen Z respondents demonstrated the most significant shift, with almost one in two (44%) conducting more than 50% of their transactions online, a rise from 30% in the previous year.

With rising online transactions, 95% of Hong Kong respondents expressed concern about falling victim to fraud, highlighting the widespread apprehension and the necessity for businesses to enhance protective measures against online deception throughout the digital journey.

Among those who indicated they were targeted by email, online, phone call or text messaging fraud within the last three months (51%), phishing (the use of fraudulent emails, websites, social posts, QR codes, etc. meant to steal data) was the leading type of fraud experienced by respondents in Hong Kong since TransUnion began conducting this survey in 2022, suggesting a persistent trend.

"While the city’s rapid digital adoption has unlocked immense economic opportunities and consumer convenience, it has also exposed vulnerabilities that sophisticated cybercriminals are actively exploiting," added Cheung. "Although consumers are increasingly aware of potential digital fraud in conducting transactions online according to our report findings, some still unfortunately became victims. To sustain business growth by effectively addressing consumers’ rising digital needs, it is crucial for businesses across all industries to leverage broader data and analytics, actively safeguarding themselves and their consumers by adopting friction-right fraud prevention solutions."

TransUnion came to its conclusions about digital fraud based on intelligence from TransUnion TruValidate. Specific country and regional data in the report includes Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Guatemala, Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, South Africa, Spain, the United Kingdom, the United States and Zambia. 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 to meet 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 represent every country worldwide and not just the select countries and regions.

2 Based on the exchange rate on Jan. 6, 2025 when calculated for the report.

3 Cyber Defender: Technology Crime Figures 

4 HKMA: Expansion of Suspicious Account Alert for internet banking and physical branches transaction

5 The Hong Kong Association of Banks: Enhancement on security measures to safeguard customers against malware scams

6 Census and Statistic Department: Median monthly employment earnings of employed persons by age and sex (excluding foreign domestic helpers) (November 2024 – January 2025)

7 Generations were defined as follows when the survey was conducted Nov. 21 to Dec. 10, 2024: Gen Z, 18–26 years old; Millennials, 27–42 years old; Gen X, 43–58 years old; and Baby Boomers, age 59 and above

Research launched in December 2024 by TransUnion reveals that nearly half (44%) of the surveyed consumers in Hong Kong were targeted by fraud through online, email, phone call or text message channels in the last three months². In response, ZA Bank is making the Credit Alert Service accessible to all its users, enhancing value and empowering them to protect themselves from rising fraud risks. 

Through this service, users will receive instant alerts via the ZA Bank App that notify them of critical changes to their credit report, including: 

• New credit report enquiries³ 
• New credit accounts opened under their name 
• Changes to addresses or phone numbers 

Devon Sin, Alternate Chief Executive of ZA Bank, said: “ZA Bank is proud to be the first bank in Hong Kong to offer the comprehensive TransUnion Credit Alert Service for free, removing the cost barrier for a vital fraud protection tool. This partnership with TransUnion reflects our commitment to leveraging innovation to protect our users’ financial well-being, especially as digital fraud continues to rise in Hong Kong. By integrating this feature into our app, we are not only enhancing security but also promoting financial inclusion to ensure more people have access to tools that safeguard their finances.” 

Wingo Wong, Managing Director of TransUnion Credit Information Services Limited in Hong Kong, said: “For years, TransUnion has been at the forefront of fraud protection, pioneering efforts to enable individuals to identify risks earlier and minimise potential losses. As digital fraud continues to rise in Hong Kong, we are delighted to partner with ZA Bank to expand our Credit Alert Service to its users. This partnership underscores the importance of collaboration between businesses and consumers in combating this escalating threat. Together, we are committed to empowering Hong Kong consumers in the fight against fraud in an increasingly digital world.” 

1 As the first digital bank to launch in Hong Kong (previously named “virtual bank”), ZA Bank had the highest number of users and customer deposits among the city’s eight digital banks as of 30 June 2024. Source: Interim reports of 8 digital banks 

2 TransUnion: Consumer Pulse Q4 2024, Dec 2024 

3 Currently only new enquiries raised through TransUnion Credit Information Services Limited by banks or financial institutions are included, and new enquiries raised through other credit reference agencies will be available gradually

• Hong Kong’s suspected Digital Fraud rate remains 10% higher than global average
• Communities, retail and financial services are most targeted in Hong Kong among industries analysed
• With their frequent digital device use, Gen Z (51%) said they’re most targeted by fraud schemes while Millennials reported being most victimised   

Research from the H2 2024 Update to the State of Omnichannel Fraud Report published by TransUnion (NYSE: TRU) finds that 5.7% of all attempted digital transactions where the consumer was in Hong Kong were suspected to be Digital Fraud in the first half of 2024 (H1 2024)[1]. This figure is 10% higher than the global average of 5.2%. The report analysis also revealed the ongoing challenges in combating fraud across industries.

Online forums and dating sites are top targets of suspected Digital Fraud in Hong Kong, mirroring global trends

In H1 2024 the communities industry, which includes web properties such as online forums and dating sites, recorded the highest suspected Digital Fraud rate among sectors analysed globally. It had the highest rate of suspected Digital Fraud in seven of the 19 countries and regions surveyed when the consumer is located in those areas during transaction, including Hong Kong. This sector faced a suspected Digital Fraud rate globally of 11.5%, while Hong Kong experienced an even higher rate of 15% in H1 2024. TransUnion's communities customers worldwide identified profile misrepresentation as the most common type of Digital Fraud they have encountered during this period.

Account creation posed the highest risk in the digital communities customer journey in Hong Kong. In fact, 29% of all attempted digital account creation transactions where the consumer was in Hong Kong were identified as suspected Digital Fraud in H1 2024, increasing 126% from H1 2023. This could be driven by bad actors using synthetic or stolen identities to open accounts. These findings align with recent reports from the Hong Kong police detailing over 500 fraudulent activities linked to fake compensated dating scams in H1 2024 involving losses of HK$243 million[2].

The retail sector reported the second highest suspected Digital Fraud attempt rate in Hong Kong at 9.5% followed by financial services at 5.5% in H1 2024. Financial services saw the largest YoY jump in the rate of suspected Digital Fraud from H1 2023 in Hong Kong among industries analysed at 29%. In the face of escalating concerns, Hong Kong’s central banking institution, the Hong Kong Monetary Authority (HKMA), is moving forward with its proposal to allow banks to share information to combat fraud with legislative amendments[3].

These initiatives are particularly important given the surge in financial losses YoY over the first six months of the year[4], echoing TransUnion’s findings that the volume of suspected Digital Fraud attempts coming from Hong Kong in financial services soared 78% from H1 2023 to H1 2024.

Communities had the highest rate of suspected Digital Fraud in H1 2024 and financial services reported the highest YoY rate increase in Hong Kong

Source: TransUnion TruValidate™

“Findings from our latest report reveal that fraudsters most often seek out targets on online communities such as forums, dating apps or messaging services globally,” said Jerry Ying, chief product officer at TransUnion Asia Pacific. “Despite the good-faith efforts that are being undertaken by local authorities and institutions to identify and prevent fraud to date, consumers and businesses confront increasingly sophisticated cybercriminals who weaponise identity data at scale to execute fraud schemes. This highlights the pressing need for businesses to continuously enhance their capabilities to safeguard consumers from online deception across industries.”

More than half of Gen Z consumers in Hong Kong report having been targeted by fraud schemes

Suspected consumer fraud remains a concern, as highlighted in TransUnion’s Q3 2024 Hong Kong Consumer Pulse Study. This survey of 860 Hong Kong adults from 16-29 July uncovered that 39% of respondents reported being targeted by online, email, phone call and text messaging fraud attempts over the past three months, with 5% saying they fell victim.

Among generations[5] surveyed (Gen Z, Millennials, Gen X and Baby Boomers), Gen Z and Millennials said they were targeted the most. Specifically, 51% of Gen Z respondents reported being targeted in the last three months, a six-percentage point rise from the Q3 2023 Study. This higher percentage than other generations may be attributed to Gen Z's frequent engagement with digital devices, which makes them particularly vulnerable to being targeted. Meanwhile, 41% of Millennials reported being targeted with fraud and had the highest rate across generations of those who said they fell victim at 7%.

Among all generations, of those reporting being targeted vishing (fraudulent phone calls meant to trick consumers into revealing data) was the most common scheme at 36%, followed closely by phishing (fraudulent emails, websites, social posts, QR codes, etc. aimed at stealing data) at 33%.

“While Digital Fraud may fluctuate, the prevailing trends in data breaches and scams have an unmistakable impact on consumers. Despite Gen Z and Millennials being particularly vulnerable demographics in the digital era, all consumers rely heavily on businesses to ensure that they enjoy a secure digital experience,” added Ying. “It is therefore imperative for businesses across industries to employ a strategy of continuous innovation and friction-right fraud prevention through technologies such as identity verification, IP intelligence, device reputation and synthetic identity detection that will all be conducive to enhancing consumer trust and deliver better business results."

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 it assessed for fraud. 

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 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, the United States and Zambia.

[1] The first half of the year or H1 refers to January 1 to June 30

[2] Hong Kong Police: Online romance scams

[3] HKMA: Conclusions of the Public Consultation on a Proposal for Information Sharing among Authorized Institutions to Aid in Prevention or Detection of Crime

[4] HK Government Press Release: Police Anti-Deception Coordination Centre launches Anti-Scam Month campaign

[5] Generations are defined in this research as follows: Gen Z, 18–26 years old; Millennials, 27–42 years old; Gen X, 43–58 years old; and Baby Boomers, age 59 and above.

The newly released TransUnion (NYSE: TRU) 2024 State of Omnichannel Fraud Report, based on proprietary insights from TransUnion’s global intelligence network, found that 6.6% of all digital transactions where the consumer was in Hong Kong were suspected to be Digital Fraud in 2023. This number is 32% higher than the global suspected Digital Fraud rate of 5% over the same time period.

The report further revealed that the volume of suspected Digital Fraud globally grew faster than the actual number of transactions worldwide as well. With the volume of suspected Digital Fraud up 14% year-over-year (YoY) in 2023 and 105% from 2019 to 2023 globally, this growth continues to outpace the growth in overall digital transactions, which rose 6% between 2022 and 2023, and 90% from 2019 to 2023.

Fewer victims in Hong Kong despite a higher suspected Digital Fraud rate

Similar to the global findings, consumers in Hong Kong were regularly targeted with scams or other forms of deception to gain access to accounts. In December 2023, half of the surveyed Hong Kong consumers (50%) reported being targeted by fraudsters through email, online, phone call or text messaging schemes in the preceding three months. However, only 5% of Hong Kong consumers that reported being targeted by fraud said they fell victim – a relatively lower figure compared to the 11% of consumers in the 18 countries and regions surveyed. This lower percentage in Hong Kong might be attributed to rising consumer awareness amid more efforts from local regulators and industry players to provide anti-fraud education, as well as other preventive measures.

Among those who said they were targeted, phishing (fraudulent emails, websites, social posts, QR codes, etc. meant to steal data) was the leading type of fraud consumers reported experiencing both in Hong Kong and globally.

Account login and account creation present highest risk in the customer journey

The report also showed that there might be a shift in tactics by fraudsters hoping to engage earlier in the transactional process along the digital customer journey. For digital transactions where the consumer is in Hong Kong, 11.1% of transactions associated with digital account login were suspected to be fraudulent in 2023. The second highest percentage of suspected Digital Fraud in the customer journey was account creation with 4.9% of all relevant online transactions were suspected to be fraudulent in 2023. Examples of this type of transaction include account signup, registration and loan origination.

The occurrence of suspected Digital Fraud at the initial stages of a customer journey (account login and creation) for transactions where the consumer is in Hong Kong was significantly higher compared to the final financial transaction stage, which had a rate of only 0.2% in 2023. This final stage involved activities such as purchases, withdrawals and deposits, which typically take place towards the end of a customer’s journey.

“This early phase account login and account creation Digital Fraud may represent a paradigm shift of sorts among fraudsters,” said Jerry Ying, chief product officer at TransUnion Asia Pacific. “Being one of the first Asian markets to issue virtual banking licenses in 2019, Hong Kong significantly accelerated the digitalisation of customer journeys across various industries, not just in the banking sector. While this has brought convenience and improved user experiences, it has also created additional touchpoints that can be exploited by fraudsters. With numerous data breaches occurring worldwide and advancements in technologies like deepfakes, it isn’t surprising that fraudsters are now taking advantage of vulnerabilities and increasingly focusing their attacks on the early stages of a customer journey.”

Retail, financial services and travel and leisure among industries most targeted by suspected Digital Fraud in Hong Kong

According to the report, for transactions where the consumer or fraudster was located in Hong Kong, the highest Digital Fraud rate was in retail, at 8.4% in 2023, down 28% from 2022. This was followed by financial services, and travel and leisure which both were 7.8% in 2023. For transactions where the consumer was in Hong Kong, the financial services industry saw the greatest increase in the suspected Digital Fraud rate, up 190% YoY in 2023.

This surge aligns with the increase in fraud cases reported by the city’s central banking institution – the Hong Kong Monetary Authority (HKMA). In 2023, the HKMA received over 1,200 fraud-related banking complaints, more than double the number for 2022. This was in line with a 52% increase in deception cases reported to law enforcement in the first ten months of last year, with estimated losses to victims of about HK$7.2 billion[1].

Retail saw the highest suspected Digital Fraud rate in 2023 in Hong Kong and globally, while financial services saw the highest growth rate in Hong Kong

Source: TransUnion TruValidate™

“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 placed at the top of the list both locally and globally,” said Ying. “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 consumers vulnerable to account takeover at an earlier stage in the customer journey. In response to this emerging shift in fraudulent behaviors, organisations across industries must proactively enhance their protection throughout the entire customer lifecycle. This entails strengthening detection and response capabilities at every touchpoint to ensure comprehensive protection for themselves and consumers.”

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) determined to be fraudulent upon customer investigation or 4) determined to be a corporate policy violation upon customer investigation — compared to all transactions it assessed for fraud.

Download the TransUnion 2024 State of Omnichannel Fraud Report to learn more. Specific country and regional data in the report includes 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, the United States and Zambia. 

[1] HKMA: How banks can contribute more to the fight against fraud and money laundering

Global information and insights company and Hong Kong’s leading credit reference agency, TransUnion (NYSE: TRU), is launching a new “Dark Web Monitoring” identity protection service to safeguard Hong Kong consumers’ identity and personal data from increasing cybercrime. This new Dark Web Monitoring service, the first to be introduced by a credit reference agency in Hong Kong, further strengthens TransUnion’s identity protection solutions tailored for the needs of Hong Kong consumers. 

According to the latest data from the Security Bureau of the Hong Kong Government[1], Hong Kong is currently experiencing an alarming rise in scams with 33,923 fraud cases in the first ten months of 2023, an increase of 52.1% year over year. Among them, nearly 70% are online scam cases.

These data echo the findings of TransUnion’s latest Identity Theft, Fraud & Dark Web Survey[2] which found that around three quarters (74%) of Hong Kong consumers are being targeted by fraudsters and 13% had become victims. Among those victims, 87% suffered monetary loss and 33% of them had lost more than HK$50,000. Despite 60% of the surveyed respondents expressing concern about becoming a victim of dark web scams, only just over 10% are now using dark web monitoring tools. However, over a half (51%) said they are likely to employ such tools eventually.

As the first credit reference agency established locally in Hong Kong, TransUnion understands the importance of identity authentication in supporting business and consumers to make informed decisions thus the protection of personal identity is crucial. Further strengthening its suites of identity protection solutions, TransUnion’s Dark Web Monitoring service is designed to protect consumers from the consequences of personal data being shared on the dark web. The service uses specialised software to search the dark web to identify websites and forums where personal information, especially those commonly used in Hong Kong, is being compromised. It then provides an instant alert so consumers can take timely action to prevent financial loss. Three powerful features of TransUnion’s Dark Web Monitoring service include:

• 24/7 worldwide cybersecurity guard – the always-on scan covers personal data widely used in Hong Kong including name, Hong Kong identity card number, passport number, date of birth, email address, telephone number, bank account number, credit card number, username and gamertag for comprehensive protection worldwide
• Powerful retrospective search capabilities – in addition to carefully scanning the dark web in real-time, the tool also looks back in time to find any data breaches to support investigations and analysis of past data losses
• Actionable recommendations and guided responses – the service offers actionable recommendations and guided responses to help users proactively respond to potential threats, such as changing passwords or notifying authorities

“Identity protection in today’s digital world is of the utmost importance and we should never underestimate the consequences of fraud. The rising number of online fraud cases we’re seeing means that it is more important for consumers to take proactive measures to protect themselves,” said Irene Foo, Director of Consumer Interactive at TransUnion Hong Kong. “The dark web has increasingly become a breeding ground for scammers and cybercriminals who exploit personal information, including not only names and email addresses, but even gaming accounts. As the first credit reference agency to launch a Dark Web Monitoring service, it further expands TransUnion’s identity protection solutions offered in the city to identify potential risks and help mitigate financial losses, providing consumers with the peace of mind they seek in cyber space nowadays.”

TransUnion Hong Kong offers three packages^[3] to suit consumers’ needs, from comprehensive packages with Credit Alert and Credit Monitoring services for all-round protection, to a 30-day free trial for all eligible Hong Kong consumers to encourage them to take a first step in enhancing personal data security and identity fraud prevention.

^# The 30-day free trial will be cancelled automatically after 30 days without any additional set-up from consumers.

^@ The basic credit alert requires activation from consumers.

^ Notifications from TransUnion when key changes are being made to credit account. Key changes include 1) New enquiry made to credit report; 2) New credit accounts being opened under consumer’s name; 3) Address changed; and 4) Phone number changed.

The three packages are exclusively available on the TransUnion HK Credit Report mobile app, which can be downloaded from Apple’s App Store or Google Play.

[1] According to the data from new.gov.hk: Rising Fraud Cases: Crime Rates Increase Over 30% in the First Ten Months

[2] TransUnion’s Hong Kong Identity Theft, Fraud & Dark Web Survey conducted an online survey on 925 Hong Kong consumers from 21 Aug 2023 to 8 September 2023

[3] Terms and conditions apply. For all product details and features, please refer to TransUnion Dark Web Monitoring service.

As consumers and businesses continue to use digital transactions as a way to engage in commerce, fraudsters are increasingly using them for their own benefit. A new TransUnion (NYSE: TRU) analysis finds that suspected global digital fraud is up in the first half of 2023 (H1 2023), and while retail and video gaming were among the most targeted industries globally during that timeframe, digital fraud affected all businesses.^1&2

In H1 2023, the global suspected digital fraud rate stood at 5.3%, up 18% when comparing to the same period in 2022. The volume of global digital fraud attempts increased 27% during that same time period. When the consumer is located in Hong Kong during the transaction, the suspected digital fraud attempt rate stood at 18.3% in H1 2023 – the highest among all markets and regions studied. The volume mirrored this rise, with a 57% increase in suspected digital fraud attempts originating from Hong Kong in H1 2023 compared to the same period last year. ²

Highest Suspected Digital Fraud Attempt Rate in Retail Globally, in Travel & Leisure for Transactions from Hong Kong

Retail, video gaming and telecommunications saw the highest rates of suspected digital fraud globally among industries analysed at 10.6%, 7.0% and 5.3% in H1 2023. Looking at sectors from a global digital transaction growth perspective, gaming (online sports betting, poker, etc.) stands out, showing an increase in total transactions of 85% from H1 2022 to H1 2023. Across the world, insurance and logistics were the industries with the lowest suspected digital fraud attempt rate in H1 2023.²

For transactions originating from Hong Kong, travel & leisure, and communities (online dating, forums, etc.) had the highest suspected digital fraud attempt rate among industries analyzed in H1 2023 at 8.1% and 4.8% respectively. With travel resuming, it’s not surprising that TransUnion found the travel & leisure industry saw the largest growth in the number of digital transactions from Hong Kong with a 243% increase from H1 2022 to H1 2023. ²

“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 Jerry Ying, chief product officer at TransUnion Asia Pacific. “There are other factors that need to be taken into consideration. These include the overall size of the industry in question, in addition to if the aforementioned industry is growing and if so, how quickly. Only then can one endeavor to develop a more comprehensive perspective on how digital fraud is impacting these industries. In addition, this can help projecting where fraudsters may be focusing their efforts moving forward.”

Travel & Leisure Saw the Greatest Suspected Digital Fraud Attempt Rate and YoY Growth in Digital Transactions Coming from Hong Kong

Source: TransUnion TruValidate™ data

38% of Hong Kong Consumers Report Having Been Targeted by Fraud

This new TransUnion analysis comes on the heels of its recent Q3 Hong Kong Consumer Pulse Study which explored, among other things, consumer awareness of being targeted by any online, email, phone call or text messaging fraud attempts in the last three months. The TransUnion survey of 973 Hong Kong adults was conducted between 10-19 July.

The survey revealed that 32% of respondents indicated that they had been targeted by fraud but did not become a victim of it, and 6% had been targeted and fell victim. Among those targeted, vishing (fraudulent phone calls meant to trick people into revealing data), at 34%, was the most frequent fraud scheme by which they reported being attacked, followed by phishing (fraudulent emails, websites, social posts, QR codes, etc. meant to steal data) at 31% and smishing (fraudulent text messages meant to trick you into revealing data) at 29%.³

“The increasing acceptance of digital services and prevalence of spam calls has significantly contributed to the growth in fraud loss. As consumers rely more on online platforms, they have higher expectations for businesses to protect them from fraudulent activities and proactively identify suspicious accounts. In response, businesses regardless of their industry shall allocate sufficient resources towards enhancing their data, analytics, and technological capabilities to identify potential fraud in a more accurate and efficient manner,” added Ying.

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

Download the Omnichannel Fraud in H1 2023 Infographic for more findings including the rate of suspected digital fraud from select markets and regions globally, and the growing problem of synthetic fraud. Specific market 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.

¹ The first half of the year or H1 refers to January 1 to June 30

² TransUnion TruValidate data (January 1 to June 30)

³ TransUnion Consumer Pulse Survey

The study showed that globally, 4.6% of digital transactions analysed were potentially fraudulent in 2022, which was largely in line with the rate seen in 2019. However, despite the easing of digital fraud rate back to the 2019 level, the volume of global digital fraud attempts increased considerably by 80% from 2019 to 2022, alongside a marked increase in digital transactions during the same period. 

In Hong Kong, 17.5% of digital transactions were suspected to be fraudulent over 2022, the highest among all countries and regions studied. When looking at the volume, it generally mirrored the global uptrend, with an 18% increase in digital fraud attempts originating from Hong Kong compared to pre-pandemic 2019. 

“The pivot to increasingly digital transactions since the onset of the pandemic means the overall risk facing consumers and businesses is even greater than before,” said Jerry Ying, chief product officer at TransUnion Asia Pacific. “As cybercriminals and fraudsters continue to evolve and become increasingly sophisticated, businesses need to step up and put in place robust fraud prevention measures to build consumer trust and safeguard their online experiences across digital channels.” 

Logistics industry sees the highest digital fraud rate growth from Hong Kong 

Globally in 2022, the gaming (online sports betting, poker, etc.) and retail industries saw the highest rate of suspected digital fraud at 7.5% and 7.2%, respectively. These were followed by video gaming at 5.4%, financial services at 4.2% and communities (i.e. online dating and forums) at 4.0%. 

For transactions originating from Hong Kong, the logistics industry saw the highest growth rate in suspected digital fraud, up by 219% from 2019 to 2022. The insurance and communities industries also saw a significant increase in digital fraud attempts from Hong Kong, up 204% and 131%, respectively, over the same period. 

Global and Hong Kong Digital Fraud Attempt Rate Change by Industry 2019-2022

Source: TransUnion TruValidate^TM

Phishing, stolen credit cards and vishing are the most prevalent threats facing Hong Kong consumers 

The study found that a large percentage of people are being impacted by digital fraud attempts across a wide range of communications channels. In a TransUnion-commissioned consumer survey across 18 countries and regions globally, 52% of respondents globally said they were targeted by digital fraud via email, online, phone call, or text messaging in the three months beginning September 2022. 

Among Hong Kong respondents, 45% said they were targeted by digital fraud attempts across these communications channels, and 5% of all surveyed fell victim over this time period. Phishing (fraudulent emails, social posts, websites and QR codes meant to steal data), at 38%, was the most commonly reported fraud scheme experienced by Hong Kong consumers, followed by stolen credit cards at 27% and vishing (fraudulent phone calls that induce you to reveal personal information) at 22%. Across generations, Millennials (born 1980–1994), Gen X (born 1965–1979) and Baby Boomers (born 1944–1964) appeared to be most concerned about vishing (at 61%, 64% and 73%, respectively), compared to Gen Z (born 1995–2004) who were most concerned about phishing (40%). 

“The explosion of digital transactions, the accelerated adoption of digital technologies, and increasing appetite for faster access to digital services have all contributed to an increase in fraud losses. At the same time, while consumers want a fast and convenient online experience, they are also expecting businesses to protect their identities and online accounts. Businesses need to employ a strategy of continuous innovation through better data, analytics and technology to more accurately detect potential fraud, while at the same time delivering a friction-right digital experience for consumers,” said Ying. 

TransUnion came to its conclusions based on intelligence from its identity and fraud product suite TransUnion TruValidate that helps secure trust across channels and delivers efficient consumer experiences. The rate or percentage of suspected digital fraud attempts reflect those which TransUnion customers either denied in real time due to fraudulent indicators or determined were fraudulent after reviewing – compared to all transactions it assessed for fraud. Specific country and regional data in the report include Brazil, Canada, Chile, Colombia, Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, Philippines, Puerto Rico, Rwanda, South Africa, Spain, United Kingdom, United States and Zambia. 

For more information and insights on global fraud trends, please download the 2023 State of Omnichannel Fraud Report. 

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)

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.

TransUnion came to its conclusions about fraud against businesses based 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.

“Sophisticated fraudsters pressure test which industries have ramped up fraud prevention measures and as a result, turn to new industries if efforts are being thwarted. That’s exactly what we have observed recently as fraudsters look for new opportunities or points of vulnerability,” said Jerry Ying, chief product officer of TransUnion APAC. “It is paramount that during this dip companies focus on optimizing the customer experience for good customers.”

Suspected Digital Fraud Attempt Rate from Hong Kong Shifts Industries

Source: TransUnion’s quarterly analysis of global online fraud trends
 

Counter to the data coming out of TransUnion’s network, consumers said they were targeted more with digital fraud from Nov. 2021 to Feb. 2022, according to the recent TransUnion Consumer Pulse Survey. Among 1,088 Hong Kong adults surveyed from Feb. 14-23, 2022, 39% said they had been targeted by digital fraud in the last three months, up six percentage points from the previous quarter. Of those consumers who said they had been targeted, they reported phishing scams most (35%) followed by identity theft and money/gift card scams (27% respectively).

“Despite consumers indicating being increasingly targeted albeit over a different time period, suspected fraud rates appear to be stabilizing more recently with our customers. During this period when fraudsters are searching for new vulnerabilities, many organizations have shifted their focus to identifying more of the good customers and transactions to increase revenue and customer lifetime value. By reducing false positives, false declines, and manual review rates, organizations can dramatically improve the customer experience through trusted connections while still keeping the fraudsters at bay,” said Jerry Ying.

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 continuous growth of e-commerce could be behind a surge in shipping fraud, which is now the fastest growing type of digital fraud worldwide, according to the 2022 Global Digital Fraud Trends Report by TransUnion (NYSE: TRU), a global information and insights company and Hong Kong’s leading consumer credit reference agency. TransUnion observed an influx in shipping fraud in 2021, resulting in a 780.5% year-over-year (YoY) global increase. When compared to a two-year timeframe from 2019 to 2021, TransUnion data shows shipping fraud grew more than 1,500+%.

Shipping fraud – defined as when a buyer spoofs a shipping address or when a seller receives payment for goods or services, but never ships to the buyer – has quickly emerged as one of the top fraud types across a variety of industries. This issue, however, was most prominent in the logistics industry where consumers purchase goods online and are then reliant on third-party carriers for transportation and delivery of items.

“As consumers shifted from brick-and-mortar retailers to e-commerce platforms over the course of the pandemic, fraudsters gravitated toward where consumers were increasingly spending both time and money,” said Jerry Ying, chief product officer of TransUnion APAC. “Online shopping has become the ‘new normal’ on a global scale and as a result, the propensity for shipping fraud has also increased.”

As consumer adoption of digital channels has continued to accelerate, the global rate for all types of suspected digital fraud attempts increased 9.4% YoY from 2020 to 2021 and 52.2% from 2019 to 2021. In addition to shipping fraud, other types of fraud that experienced large increases when comparing 2020 to 2021 include business identity theft (+113.8%) and identity mining / phishing attempts (+104.8%) which both showed high rates of annual growth. According to TransUnion’s recent survey of 12,500 adults worldwide, 62% of consumers reported identity theft as their greatest concern when it comes to digital fraud.

Common Fraud Types Increased Across Industries from 2020 to 2021

“Nearly half of all consumers worldwide surveyed by TransUnion said they are conducting the majority of their transactions online, covering everything from managing personal finances and shopping to conducting business matters, which has led to an elevated consumer expectation in terms of both experience and security. To effectively mitigate digital fraud risks, businesses should ensure there are strong authentication processes in place as well as streamlined technology and multi-layered identity solutions. These solutions will help build trust with customers and thwart these fraud tactics,” said Ying.

Communities, travel & leisure, and financial services were top three industries in Hong Kong with the highest YoY increase in rate of digital fraud attempts

For transactions originating from Hong Kong, communities saw the largest percentage of annual fraud growth in 2021 with an increase of 72.6% YoY. Travel & leisure (51.8%) and financial services (40.9%) were the second and third industries with the largest growth in the rate of suspected digital fraud attempts. Gaming was another significantly affected industry and increased 21.0% YoY while gambling (20.8%) rounded out the top five.

The growth of digital fraud coming from Hong Kong in communities began since before the start of the pandemic. When comparing the rate of digital fraud coming from Hong Kong in communities from 2019 to 2021, it grew 125.6% potentially due to more people interacting socially online during the pandemic on places like online dating sites/apps. In 2021, global traveling had also been recovering in many other parts of the world, and fraudsters in Hong Kong appeared to try to take advantage of this.

Year-over-Year Growth Rates of Digital Fraud Attempts (2020 – 2021)

Digital fraud in financial services remains one of the prime targets for fraudulent activity both coming from Hong Kong and worldwide, and the rate of suspected digital fraud targeting that industry grew 40.9% and 33.5% YoY, respectively, making it an increasing area of concern for businesses and consumers alike. The number one fraud type worldwide in financial services is true identity fraud – where the victim is a real person and a fraudster uses a stolen identity to commit fraudulent transactions. As such, many financial institutions have taken steps to put greater security measures and authentication solutions in place, especially since digital banking is regarded as the industry standard.

“Fraud continues to impact a variety of different business sectors and fraudsters are always looking for the next opportunity. However, there are some industries that continue to have a target on their backs – such as financial services or social platforms – that should preemptively employ fraud detection solutions and strategies to better serve customers and protect their bottom line,” said Ying.

TransUnion came to its conclusions about fraud against businesses based 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 it assessed for fraud.

For more information and insights on global fraud trends with Hong Kong figures, please download the report.

TransUnion (NYSE: TRU) released new findings today around global e-commerce fraud trends that occurred during the busiest period of the 2021 holiday shopping season. The analysis found 17.46% of all global e-commerce transactions between Thurs., Nov. 25, and Cyber Monday, Nov. 29, were potentially fraudulent[1]. In Hong Kong, 20.47% were suspected fraudulent during that same period and including Double Eleven Shopping Festival, Nov. 11.

The global percentage of suspected fraudulent e-commerce transactions is 3.74% higher than the same five-day period leading up to Cyber Monday last year. For transactions originating from Hong Kong, the percentage decreased 29.20% in the same timeframe plus Nov.11. These findings are based on intelligence from billions of transactions, and more than 40,000 websites and apps contained in TransUnion’s fraud analytics solution suite — TruValidate™,.

The analysis also observed the top two reasons globally for potentially fraudulent e-commerce transactions in the five days leading up to Cyber Monday. The top reason was the number of accounts per device – which triggers when a device has accessed the minimum number of accounts during the set time period. The second was evidence exists – which occurs when an account or device has previously had a fraudulent transaction.

Percentage of Suspected Fraudulent E-Commerce Transactions during Holiday Shopping Weekend

Source: TransUnion’s quarterly analysis of global online fraud trends

“The holiday shopping season is a popular time globally for bad actors to engage in fraudulent activity, particularly in the e-commerce and retail industry,” said Jerry Ying, Chief Product Officer of TransUnion APAC. “Despite the decline of suspected digital fraud originating from Hong Kong during the traditional busiest days of the holiday shopping season, levels are still above the global average and occurred as consumers express concern about being victimized. According to TransUnion’s Q4 Consumer Pulse Study, 84% of Hong Kong consumers are concerned with being victimized by online fraud this holiday season. It is imperative that those businesses equip themselves with the proper tools to detect fraud at the first warning sign without inhabiting the consumer journey.”

In addition to the above findings, TransUnion released the following fraud analysis for Hong Kong regarding the percentage of suspected fraudulent e-commerce transactions during the start of the holiday shopping season and entire year from 2019 to 2021.

• 20.47% from Nov. 25 – 29 plus Nov. 11, 2021; 26.30% so far in 2021
• 28.91% from Nov. 26 – 30 plus Nov. 11, 2020; 41.34% in 2020
• 20.81% from Nov. 28 – Dec. 2 plus Nov. 11, 2019; 8.02% in 2019

Percentage of Suspected E-Commerce Fraud – Holiday Season vs. Overall

 Source: TransUnion’s quarterly analysis of global online fraud trends

To find out how this data varies by select countries and regions, how mobile is playing a large part in digital holiday fraud, what days during the holiday shopping season are most popular for fraud and more, TransUnion’s holiday fraud trends can be found here.