Digital fraud attempts coming from the Philippines in financial services have increased by 19 percent in January to April this year compared with the last four months of 2020, according to TransUnion’s latest report.
Across industries, the rate of suspected digital fraud attempts globally rose 24 percent when comparing the first four months of 2021 with the last four months of 2020.
TransUnion monitors digital fraud attempts reported by businesses in varied industries such as communities, financial services, gambling, gaming, retail and telecommunications, among others.
The conclusions are 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 rate of fraud attempts was up globally and especially in the financial services industry because fraudsters understand this is where the most high-value transactions are taking place. While this industry is traditionally known for in-person transactions, fraudsters have recognized its rapid digital acceleration and are trying to capitalize,” said Pia Arellano, TransUnion Philippines president and chief executive officer.
“We are seeing more financial services organizations implement fraud prevention solutions with some success, though our findings make it clear that this is not the time to relax. As the economy begins to open up and perform better, businesses need to do even more to ensure they are providing a secure marketplace that offers friction-right experiences to consumers,” Arellano added.
Financial services had the third highest increase in the rate of suspected digital fraud during the March analysis, jumping to the top spot.
TransUnion defines true identity theft, the top type of digital fraud in financial services, as the consumer using a stolen identity (from a victim who is a real person) to commit fraud.
The second and third type of digital fraud most reported by TransUnion financial services customers are first-party application fraud and account takeover, respectively.
First-party application fraud is when a consumer refuses to repay legitimately incurred debts and/or falsely claims to be a victim of identity fraud to evade debt.
Account takeover is when someone other than the owner of an account uses the account without permission, indicating that the account has been maliciously compromised.
“An interesting dynamic is playing out where we are seeing other industries facing far fewer suspected fraud attempts than what has been observed in financial services. In some cases, as in logistics and retail, we are seeing a decline in the rate of such fraud attempts,” said Arellano.
She said the key takeaway for businesses is that fraudsters do not treat every industry equally. They often pick and choose an industry to focus on based on the time of year or what businesses are seeing more transactional activity.
For example, the rate of suspected digital fraud attempts originating from the Philippines against online communities like dating sites and forums increased by 10 percent, whereas the global average decreased 4 percent.
“At times, fraud attempts are conducted at random simply to determine if businesses are prepared to meet their challenges. In this critical time, it pays to be one step ahead,” Arellano said.
