Online fraud on the rise- Read this before purchasing commodities online
TransUnion has released new findings around global e-commerce fraud that occurred during the start of the 2022 holiday shopping season.
The analysis found 15% of all global e-commerce transactions reviewed between November 24-28 were potentially fraudulent. For transactions originating from Kenya, 5.4% of e-commerce transactions during that period were suspected to be fraudulent.
These findings are based on intelligence from billions of transactions contained in TransUnion’s TruValidate fraud analytics solution suite.
The analysis also determined that the average number of suspected digital fraud attempts on any given day during that holiday period globally was 82% higher than during the rest of the year (Jan. 1, 2022 to Nov. 23, 2022).
For transactions originating in Kenya, this percentage was 15% lower than during the rest of the year and was 42% higher than the same period in 2021.
“Fraudulent activity tends to be particularly prevalent in online retail during the holiday shopping season,” said Shai Cohen, senior vice president and head of global fraud solutions at TransUnion.
Despite the fact that consumers have begun returning in larger numbers to in-person shopping in the post-pandemic era, online retail continues to be the preferred means of holiday shopping for many. It is important that online retailers ensure consumer security and privacy protections, which is important to consumers, but in a way which ensures a seamless shopping experience that minimizes unnecessary friction.
TransUnion also revealed in the analysis the top types of fraudulent e-commerce transactions globally.
This year, promotion abuse (user abuses site promotions such as refer-a-friend, free giveaways, etc.) and account takeover (someone other than the owner of an account uses it without permission, indicating that the account has been maliciously compromised), were the top types of digital fraud in retail.
“Online retailers must equip themselves with the proper tools to detect fraud at the first warning sign, and without inhibiting the consumer journey,” said Morris Maina, Chief Executive Officer TransUnion Kenya.
“It’s more important than ever that these online retailers implement holistic fraud solutions that are able to verify customer identity and authenticity at the very beginning of a transaction without resulting in false positives that may cost them legitimate transactions,” he said.
The increase of suspected digital fraud during the traditional busiest days of the holiday shopping season occurred as consumer’s express concern about being victimized. TransUnion’s 2022 Consumer Holiday Shopping Survey found that 63% of Kenyan consumers are concerned with being victimized by online fraud this holiday season.
TransUnion monitors digital fraud attempts reported by businesses in varied industries such as gambling, gaming, financial services, healthcare, insurance, retail, and travel and leisure, among others.
The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in TransUnion’s flagship identity insights, digital insights, omnichannel authentication, and fraud analytics solution suite – TruValidate.
