CHICAGO, Aug. 10, 2022 (GLOBE NEWSWIRE) — For the second straight quarter, the rate of suspected global digital fraud attempts in the insurance industry saw its largest year-over-year increase, rising 159% between Q2 2021 and Q2 2022. This follows a Increase of 134% between Q1 2021 and Q1 2022. Despite this increase in fraudulent activity in the insurance industry, TransUnion’s quarterly fraud analysis (NYSE:TRU) observed that the rate of suspected digital fraud attempts across industries worldwide decreased approximately -14% between Q2 2021 and Q2 2022.
TransUnion reached its conclusions on fraud against businesses based on information from billions of transactions and more than 40,000 websites and apps contained in its flagship identity verification, risk-based authentication and fraud analysis solution suite – TransUnion TruValidate™. The percentage or rate of suspected digital fraud attempts are those that TruValidate customers either rejected or verified based on fraudulent indicators, compared to all transactions that were checked for fraud.
Among the industries where the rate of suspected digital fraud activity decreased the most from Q2 2021 to Q2 2022 were Gaming, Travel & Leisure and Retail. TransUnion only observed an increase in insurance and logistics during this period. Even for transactions originating in the USA, TransUnion observed only an increase in the suspected rate of digital fraud in the insurance and logistics sector year on year. However, insurance growth was much smaller than globally, up 22% compared to the second quarter of 2021. Logistics increased by 15%.
First party application fraud was the most common insurance-related fraud impacting this industry. This type of fraud includes fraudulent claims that intentionally contain inaccurate or manipulated information provided by the policyholder with the intention of obtaining certification, lower rates or better terms on a policy/contract.
“We have observed interesting trends in the first half of 2022, with suspected fraudulent activity in the insurance industry continuing to increase during the first six months of the year,” said Shai Cohen, TransUnion’s senior vice president of global fraud solutions. “Over the past several years, we’ve seen scammers shift their industry focus every quarter. We believe the insurance industry is seeing more ‘soft cheating’ at this time, as some consumers may misrepresent their policies to save money, particularly in a high-inflation environment that is putting more strain on their wallets.”
Suspected fraud attempts are shifting to new industries worldwide
|Industry||Rate change from Q2 2021 to Q2 2022|
|Communities (online dating, forums, etc.)||-8th%|
|Travel & Leisure||-28%|
Shifts in US fraud largely resemble global trends
Overall, the rate of suspected digital fraud in the United States decreased by almost -19% year-on-year from Q2 2021 to Q2 2022 across all industries. TransUnion saw the largest declines in US-based transactions in gaming (-65%) and gaming (-49%). Retail (-32%) and financial services (-28%) also recorded declines.
While insurance and logistics were the only industries to see increases, the types of fraud varied greatly. While insurance focused on application fraud, shipping fraud dominated in logistics. This is a type of scam where a buyer fakes a shipping address or a seller receives payment for goods or services but never ships to a buyer.
Digital fraud remains a constant in the lives of many US consumers. TransUnion’s latest Consumer Pulse study found that nearly four in ten (38%) American adults report experiencing digital scams. And 11% fell victim to scams such as phishing, identity theft, or other types of fraud.
“For industries seeing fraud stabilization, the focus has been on identifying more good transactions and customers to let them happen with less friction,” said Sean Donnelly, senior vice president and go-to-market global fraud solutions at TransUnion. “Strong fraud and authentication practices reduce false positives and focus anti-fraud resources on the minority of interactions that require verification. By reducing the pool of manual reviews and customer surveys, businesses can dramatically reduce costs, increase revenue, and improve the overall customer experience.”
For global and regional breakdowns on how much the number of suspected digital fraud attempts has changed recently, which types of fraud are most prevalent in specific industries, and more, please download the infographic.
About TransUnion (NYSE:TRU)
TransUnion is a global information and insights company that enables trust in the modern economy. We do this by providing an actionable image of each person so that they can be reliably represented in the marketplace. As a result, businesses and consumers can do business with confidence and achieve great things. We call this Information for Good®.
TransUnion is a leading presence in more than 30 countries on five continents, providing solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.