TransUnion Report Finds Digital Fraud Attempts Surge 18% in Hong Kong and 80% Globally From Pre-Pandemic Levels
Despite digital fraud rates returning to close to pre-pandemic levels, the volume continued to rise in 2022, according to the 2023 State of Omnichannel Fraud Report released by TransUnion (NYSE: TRU), a global information and insights company and Hong Kong’s leading credit reference agency. The report blends proprietary insights from TransUnion’s global intelligence network and a specially commissioned consumer survey in 18 countries and regions globally to examine digital fraud trends and prevention strategies to enable trust in today’s omnichannel marketplace.
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
Hong Kong suspected digital fraud attempt rate % change 2019-2022
Global suspected digital fraud attempt rate % change 2019-2022
Global suspected digital fraud attempt rate 2022
|Communities (online dating, forums, etc.)|
|Gaming (online sports betting, poker, etc.)|
Source: TransUnion TruValidateTM
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.