Rate of Suspected Digital Fraud Attempts Coming from Canada Decreased 41% as Fraudsters Recognize More Businesses are Implementing Fraud Prevention Measures

TORONTO, May 17, 2022 (GLOBE NEWSWIRE) -- The rate of digital fraud originating from Canada decreased in Q1 2022, with suspected online fraud attempts declining -40.6% from the same quarter last year, in line with the global decrease of -22.6%. TransUnion's (NYSE:TRU) quarterly digital fraud analysis observed that while the overall rate of suspected fraud declined in Canada, there were significant shifts year-over-year (YoY) in suspected digital fraud rates within certain industries. Sectors such as financial services, telecommunications, communities (i.e. online dating), and gambling all saw a YoY decrease in the attempted digital fraud rate from Canada. Conversely, fraudsters in Canada significantly increased their scams in sectors such as insurance, gaming, and travel and leisure.

"What we are observing in Canada, and on a global stage, is that these sophisticated fraudsters are shifting their focus to target new industries as prior industry targets have ramped up fraud prevention measures. In other words, fraudsters are constantly seeking out new opportunities based on vulnerabilities," said Patrick Boudreau, head of identity management and fraud solutions at TransUnion Canada. "What's critical is that companies don't become complacent with fraud prevention measures as fraudsters become ever more sophisticated. At the same time, companies should leverage this temporary shift in fraudulent activity to focus on optimizing customer experience without compromising security."

Rate of Digital Fraud Attempts Decrease in Canada, but Some Industries See Growth

The financial services industry saw the largest YoY decrease in the suspected fraud attempt rate for digital transactions coming from Canada at -88.2%. When digital fraud in financial services did occur, TransUnion found the most dominant type in that industry was first party application fraud. That's when an individual completes a fraudulent application(s) that contains intentionally inaccurate or manipulated information with the intention of receiving a lower rate or better terms for a policy or contract.

Certain business sectors, however, were more prone to digital fraud attempts, with fraudsters having cycled through certain industries during the pandemic and now rotating to other vulnerable industries. The insurance industry exhibited the greatest YoY growth in the rate of suspected digital fraud coming from Canada in Q1 2022 by 150.8%, potentially because of the large transactions involved in insurance. Travel and leisure showed the second highest YoY increase by 59.9%. As the Canadian economy normalized from the height of the pandemic, this sector has opened up with Canadians resumed travelling again. The gaming industry experienced the third highest YoY increase at 20.2%. This was followed by the logistics industry, which increased 13.2% YoY, mostly impacted by shipping fraud ? which is when a buyer spoofs a shipping address or when a seller receives payment for goods or services, but never ships to the buyer.

Year-over-year Growth Rates of Digital Fraud Attempts (Q1 2021 to Q1 2022)

While there has been an overall decrease in suspected digital fraud attempts on businesses, the overall rate of fraud attempts reported by Canadian consumers has not shifted significantly, according to the recent TransUnion Consumer Pulse Study. The survey of 1,069 Canadian adults conducted from Feb. 14-17, 2022, determined that 32% of Canadians had been targeted by digital fraud in the last three months compared to 33% the previous quarter. Among those surveyed, 26% say they had been targeted by a fraud scheme but did not become a victim of it while 6% did fall victim.

Of those Canadians who say they had been targeted, the types of schemes they reported included:

• Phishing (39%)
• Money or gift card (22%)
• Stolen credit card or fraudulent charges (21%)
• Third-party seller scams on legitimate online retail sites (21%)
• Identity theft (16%)
• Fundraising (15%)
• Account takeover (14%)
  

"As digital fraud rates stabilize in Canada during a period when fraudsters are searching for new vulnerabilities, it's important that organizations shift their focus to identifying more of the ?good' customers and transactions to drive revenue and customer lifetime value. By reducing false positives, false declines and manual review rates, organizations can improve their customer experience through trusted connections while still keeping the fraudsters at bay," said Boudreau.

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.

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 TruValidatetm. 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.

About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.® TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people in more than 30 countries. Our customers in Canada comprise some of the nation's largest banks and card issuers, and TransUnion is a major credit reporting, fraud, and analytics solutions provider across the finance, retail, telecommunications, utilities, government and insurance sectors.