TORONTO, Ont., Sept. 22, 2022 (GLOBE NEWSWIRE) — According to a TruValidate study by TransUnion Canada, the rate of suspected digital fraud attempts in the insurance industry increased the most for the second consecutive quarter-year basis, up 159% between Q2 2021 and Q2 2022 (+125% from Canada). This follows a global increase of 134% between Q1 2021 and Q1 2022 (+151% originating in Canada). Despite this surge in suspected fraud against the insurance industry, TransUnion’s (NYSE:TRU) quarterly fraud analysis found that the overall rate of suspected digital fraud attempts across all industries worldwide decreased by approximately -14% between Q2 2021 and Q2 2022 . Suspected in Canada The number of digital fraud attempts decreased by -37% over the same period.
TransUnion observed a decrease in the rate of suspected digital fraud attempts on Canada-based transactions across a range of industries including: Gaming (-66%), Financial Services (-52%), Retail (-31%), Telecom (-13%), travel and leisure (-6%) and logistics (-3%).
Conversely, the only non-insurance industries to report a year-on-year increase in suspected digital fraud attempts from Canada in the second quarter of 2022 were communities such as online dating, forums, etc. (+10%) and gambling (+8%). However, the types of scams these three industries faced were very different. First-party application fraud was the top insurance-related digital fraud impacting this industry globally. 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. Whereas other communities have been dominated by profiling misrepresentation, ie when users post inaccurate information on a profile and/or use false profile photos.
“Over the past several years, we’ve seen scammers shift their industry focus each quarter as they realize companies have put more controls in place. These scammers are like chameleons – they’re always adapting,” said Patrick Boudreau, director of identity management and fraud solutions at TransUnion Canada. “We have observed interesting trends during the first half of 2022, with suspected fraudulent activity in the insurance industry increasing over the first six months of the year. We believe the insurance industry is now seeing more ‘soft cheating’ – that is, when a policyholder misrepresents certain information or circumstances in order to lower the policy’s premium. Some consumers may misrepresent their policies to try to save money, especially in a high-inflation environment that puts more strain on their wallets.”
Digital fraud remains a constant in the lives of many Canadian consumers. TransUnion’s latest Consumer Pulse study found that approximately 3 in 10 (31%) Canadian adults reported experiencing digital scams. And 7% fell victim to scams such as phishing, identity theft, or other types of fraud.
Suspected digital fraud attempts are shifting to new industries globally compared to Canada
|Industry||Price change in Canada from Q2 2021 to Q2 2022||Global interest rate change from Q2 2021 to Q2 2022|
|Communities (online dating, forums, etc.)||+10%||-8th%|
|Travel & Leisure||-6%||-28%|
“The digital acceleration caused by the pandemic has permeated industries that have traditionally operated offline, which scammers are trying to take advantage of,” Boudreau said. “At the same time, for industries noticing that fraud cases are beginning to stabilize, the focus has shifted to identifying the ‘good’ transactions and allowing them to sift through them with less friction. Implementing the necessary security measures to weed out potential scammers without creating friction for their real customers is a challenge for many industries and companies. Strong fraud and authentication practices can dramatically 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.”
About the study
TransUnion came to its conclusions about 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.
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 it 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 include some of the nation’s largest banks and card issuers, and TransUnion is a major provider of credit reporting, fraud and analytics solutions to the financial, retail, telecom, utility, government and insurance industries.