13 August 2022

Rate of Suspected Digital Fraud Attempts Coming from Zambia Decreases 13%

The rate of digital fraud originating from Zambia decreased in Q1 2022, with suspected online fraud attempts declining -13.4% from the same quarter last year, in line with the global decrease of -22.6% during that same time period. TransUnion’s (NYSE:TRU) quarterly digital fraud analysis observed that while the overall rate of suspected digital fraud declined in Zambia, there were significant shifts year-over-year (YoY)  within certain industries.

Sectors such as financial services and retail saw YoY decreases in the suspected attempted digital fraud rate from Zambia. Conversely, fraudsters in Zambia increased their suspected scams in sectors such as communities (i.e. online dating), gambling, and travel and leisure.

“What we observed in Zambia and globally is that sophisticated fraudsters are shifting their focus to target new industries as sectors previously targeted have ramped up fraud prevention measures. In other words, fraudsters are constantly seeking out new opportunities based on vulnerabilities,” said Amritha Reddy, Head of Fraud at TransUnion South Africa.

“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 optimising customer experience without compromising security.”

Rate of Digital Fraud Attempts Decrease in Zambia, 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 Zambia, at -51.0%. When digital fraud in financial services did occur, TransUnion found the most dominant type in that industry globally was first party application fraud. That’s when an individual completes fraudulent applications that contain intentionally inaccurate or manipulated information with the intention of receiving a lower rate or better terms for a policy or contract.

Fraud attempts, with fraudsters have cycled through certain industries during the pandemic and are now rotating to other vulnerable sectors. This makes these vulnerable sectors more prone to digital fraud attempts. The communities industry exhibited the greatest YoY growth in the rate of suspected digital fraud coming from Zambia in Q1 2022 at 114.5%, with the most prevalent type of fraud globally being profile misrepresentation, where users post inaccurate information in profile or use bogus profile photos.

Gambling showed the second highest increase in Zambia at 66.3%, with the most prevalent type of fraud globally being promotion abuse – where a user abuses site promotions such as refer-a-friend, reload deposit bonuses and free giveaways.

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

Industries Affected by Fraud Zambia Global
Insurance N/A +134.5%
Gambling +66.3% +50.1%
Logistics N/A +42.7%
Travel and Leisure +10.9% +13.3%
Gaming N/A +6.9%
Communities (online dating, forums, etc.)  +114.5% -6.1%
Retail -21.6% -7.6%
Telecommunications N/A -20.4%
Financial Services -51.0% -63.6%

“As digital fraud rates stabilise in Zambia 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 Reddy.  

TransUnion derived to its conclusions on fraud against businesses 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 TruValidate™. 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.

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.

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®.

A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.

For more information visit: www.transunionafrica.com

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