In the first half of 2024, 4,9% of all attempted digital transactions where the consumer was located in South Africa were identified as suspected digital fraud, according to TransUnion analysis, which also determined telecommunications, financial services, and communities (online dating, forums etc.) were the industries that had the highest suspected digital fraud rate for transactions.
South Africa had the eighth highest rate of suspected digital fraud in the first half of 2024 out of the 19 countries where TransUnion provided regional breakdowns in its analysis.
This is at a time when about six in 10 (59%) of South African consumers said in Q2 2024 that they were targeted by email, online, phone call, or text messaging fraud in the past three months – which increased to 60% in Q3.
“Despite the good-faith efforts that are being made by global organisations to identify and prevent fraud to date, fraudsters continue to evolve,” says Amritha Reddy, senior director of fraud solutions at TransUnion South Africa. “In that sense, businesses should ensure that they are taking advantage of fraud prevention technologies such as identity verification, IP intelligence, device reputation, and synthetic identity detection as critical components of their fraud prevention programs.”
The communities industry experienced the largest percentage (11,5%) of suspected digital fraud globally in H1 2024, according to data in TransUnion TruValidate.
Globally, TransUnion’s communities customers reported profile misrepresentation (where a user posts inaccurate information in a profile and/or uses bogus profile photos) as the most frequent type of digital fraud they witnessed. Communities was the industry with the highest suspected digital fraud rate in seven of the 19 countries and regions for which TransUnion provided breakdowns.
Digital fraud can occur at different steps in a customer’s transaction process – and more than two-thirds of business leaders surveyed by TransUnion indicated that at least 25% of their organisation’s new account openings are done online, with more than a third saying that it was 51% or more.
In South Africa, 5,1% of attempted digital account logins were suspected of digital fraud, with 2,9% of digital account opening attempts being suspected of digital fraud.
TransUnion also determined synthetic identity fraud (the use of personally identifiable information or PII to fabricate a person or entity in order to commit a dishonest act for personal or financial gain) was the fastest growing digital fraud type volume-wise – increasing 153%.
Electronic fund transfers (also known as ACH/debit payments) fraud saw the highest YoY volume growth, up 113% from H1 2023 to H1 2024.
However, promotion abuse (consumers or fraudsters taking advantage of marketing offers to receive unintended financial incentives) was the most common digital fraud type globally in H1 2024, accounting for 3,6% of all digital fraud reported to TransUnion by its customers.