Credit, Collections & Insolvency News
New data published by global information and insights provider, TransUnion, has shown that digital fraud in the gaming sector – which includes online sports-betting and casinos etc. – is the highest in the UK.
TransUnion found that 7.3% of all transactions in that industry where the consumer was located in the UK were suspected digital fraud attempts in 2023. However, the rate of suspected digital fraud in gaming decreased 10% year-on-year (YoY).
The research found that outside of the gaming industry, travel and leisure saw the next highest rate of suspected digital fraud for transactions where the consumer was in the UK in 2023 at 6.0%. This represents a YoY increase of 18% for the travel and leisure industry and accompanies an overall increase in the raw number of digital transactions where the consumer was located in the UK recorded for the sector.
Chad Reimers, General Manager of fraud and ID at TransUnion said “While the gaming sector saw the highest rate of potentially fraudulent transactions versus other sectors, the fact that this figure is decreasing year-on-year is positive.”
“We are working hard with providers across sectors to ensure consumer confidence, but there is still much work to be done, as fraudsters are constantly changing their tactics. Through our User Group forums – and working with providers to regularly optimise their fraud prevention strategies – we can help protect the digital economy and ensure trust between providers and their consumers across their respective life-cycles.”
Globally, retail surpassed gaming as the industry seeing the highest rate of suspected digital fraud in 2023 at 8.7%, up 21% YoY. In addition, the global telecommunications industry saw a 111% YoY increase in the suspected digital fraud rate globally, up to 4.5%.
The study found that 3.6% of all transactions where the consumer was in the UK were suspected to be digital fraud in 2023 – compared with 5% globally. Despite there being some sectors that were more at risk, the increase in the volume of digital transactions from 2022 to 2023 where the consumer was in the UK (+7%) outpaced the increase in the volume of suspected digital fraud (+2%), demonstrating the positive impact of ongoing efforts to fight fraud. Meanwhile, the volume of suspected digital fraud was up globally by 14% from 2022 to 2023 and 105% from 2019 to 2023, outpacing the growth in digital transactions, which rose 6% and 90% respectively.
The data also indicated a potential shift in tactics by fraudsters. For transactions where the consumer was in the UK in 2023, 5.5% of newly created accounts were suspected to be digital fraud, the highest percentage of digital fraud in the online customer journey in the region. This may represent bad actors hoping to engage earlier in the transactional process; examples of the types of transactions that take place during the account creation process include account signup, registration and loan origination. Similarly, the study showed that 13.5% of global transactions associated with online account creation were suspected to be digital fraud last year.
Kelli Fielding, Chief Product Officer at TransUnion said “This early phase new account digital fraud may represent a paradigm shift among fraudsters. In lieu of using traditional tactics to gain access to and ultimately compromise existing accounts, they are increasingly choosing to create new accounts that they can control themselves. These fraudsters leverage synthetic identities, assembled in large part through the use of credentials gathered as a result of one or multiple data breaches.”
Gaming sector saw the highest suspected digital fraud rate in 2023 in the UK, while retail recorded the highest rate globally
| Industry |
UK suspected digital fraud attempt rate 2023 |
UK suspected digital fraud attempt rate % change YoY | Global suspected digital fraud attempt rate 2023 | Global suspected digital fraud attempt rate % change YoY |
| Gaming (online sports betting, poker, etc.) | 7.3% | -10% | 5.3% | -30% |
| Travel & leisure | 6.0% | 18% | 2.3% | 8% |
| Communities (online dating, forums, etc.) | 3.7% | 1% | 4.6% | 17% |
| Telecommunications | 2.2% | -5% | 4.5% | 111% |
| Financial services | 1.9% | -5% | 4.3% | 3% |
| Insurance | 1.5% | -6% | 1.5% | -8% |
| Retail | 1.3% | 3% | 8.7% | 21% |
