CHICAGO– The overall rate of suspected digital fraud across all industries decreased nearly 19% YoY from Q2 2021 to Q2 2022 in the United States, according to a new analysis.
Meanwhile, digital fraud continues to be a “constant” in the lives of many U.S. consumers, according to TransUnion, which said its latest Consumer Pulse study found that nearly four in 10 (38%) American adults reported experiencing digital fraud attempts, with more than one-in-10 falling victim.
The quarterly fraud analysis, from TransUnion found the largest declines from U.S.-based transactions in gaming (-65%) and gambling (-49%). Retail (-32%) and financial services (-28%) also saw declines.
The only industries to see increases were insurance and logistics, although the types of fraud were much different.
The TransUnion report said that for the second consecutive quarter, the rate of suspected global digital fraud attempts in the insurance industry experienced the greatest rise on a year-over-year basis, increasing 159% between Q2 2021 and Q2 2022. This follows a 134% increase between Q1 2021 and Q1 2022.
Despite this rise in fraudulent activity in the insurance industry, TransUnion said its quarterly fraud analysis observed the rate of suspected digital fraud attempts across industries globally declined by approximately 14% between Q2 2021 and Q2 2022.
How Findings Were Tracked
TransUnion said its findings related to fraud against businesses is based on intelligence from billions of transactions and more than 40,000 websites and apps contained in the company’s flagship identity proofing, risk-based authentication and fraud analytics solution suite 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, TransUnion added.
Industries seeing the largest declines in the rate of suspected digital fraudulent activity from Q2 2021 to Q2 2022 included gaming, travel and leisure, and retail.
TransUnion reported it only observed increases in insurance and logistics during this time period. For transactions originating from the U.S., TransUnion said it also only observed increases in the rate of suspected digital fraud in insurance and logistics year over year.
“However, the insurance increase was much smaller than globally, rising 22% when comparing Q2 2021 to Q2 2022. Logistics rose 15%,” TransUnion said.
According to TransUnion, first-party application fraud was the top insurance-focused fraud impacting that industry. This type of fraud involves fraudulent applications containing intentionally inaccurate or manipulated information provided by the policyholder with the intention of receiving certification, lower rates or better terms for a policy/contract.
Different Types of Fraud
While insurance and logistics were the only industries to see increases, the types of fraud were much different, TransUnion said.
“Whereas insurance focused on application fraud, logistics was dominated by shipping fraud. This is a type of fraud where a buyer spoofs a shipping address or a seller receives payment for goods or services, but never ships to a buyer,” the company stated.
Consumers Targeted
Digital fraud continues to be a constant in the lives of many U.S. consumers. TransUnion’s latest Consumer Pulse study found that nearly four in 10 (38%) American adults reported experiencing digital fraud attempts. And 11% fell victim to fraud such as phishing, identity theft or other types of fraud.
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