A recent TransUnion (NYSE: TRU) analysis finds that fraud is said to be costing businesses the equivalent of nearly 7% of revenues.
According to the extensive report from TransUnion, three in four business professionals indicated fraud stayed the “same or increased” in the last year; synthetic identity lending exposure reaches “all-time high.”
A global TransUnion (NYSE: TRU) analysis found that fraud continues to significantly “impact businesses” along with their “bottom lines” or revenue streams.
The H2 2024 Update to the State of Omnichannel Fraud Report, which explores fraud trends in the first half (H1/January 1-June 30, 2024) of this year, further revealed that the lender risk exposure to synthetic identities for U.S. auto loans, bank credit cards, retail credit cards and unsecured personal loans reached their “highest point ever.”
Among the findings in the report were the results of a TransUnion survey of more than 800 business leaders in Canada, India, the U.K. and the U.S. which revealed total “fraud losses of 6.5% equivalent of their companies’ revenue.”
This totaled about $359 billion among these business leaders’ organizations, a number which projects out “exponentially greater when considering these represent only a small percentage of business leaders.”
Among those surveyed in the U.S., they stated that their business / company lost the equivalent of “6.7% of their revenue due to fraud over the past year, totaling $112 billion.”
In addition to these concerning updates, as many as 75% of the global survey respondents said that every type of fraud they “measured stayed the same or increased year-over-year (YoY).”
Almost half of respondents pointed out that scam/authorized fraud, wherein a person is tricked into giving up “something of value, saw the greatest YoY increase.”
It was also the most common cause of fraud loss according to global respondents at “31% and US respondents at 35%.”
Notably, in the United States, this was more than double the next most common cause “of fraud losses – synthetic identity fraud at 17%.”
Protecting customers and their businesses from fraud is essential to enabling safe and tailored consumer experiences.
These findings reveal that despite the good-faith efforts that are being undertaken by global organizations to “identify and prevent fraud to date, fraudsters continue to evolve and it’s vital that fraud prevention methods keep up with the changing times.”
Business that aren’t already doing so 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.”
In H1 2024, the communities industry – which includes web properties like online forums and dating sites – experienced “the largest percentage (11.5%) of suspected Digital Fraud globally.”
This represents a 23% increase over H1 2023.
TransUnion’s communities customers reported profile misrepresentation as the most “frequent type of fraud they witnessed in H1 2024.”
Not surprisingly, the communities industry had the highest suspected Digital Fraud rate in “seven of the 19 countries and regions analyzed in H1 2024.”
In terms of global volume, synthetic identity fraud was the fastest-growing Digital Fraud type across industries “from H2 2023 to H1 2024, increasing by 153%. Electronic fund transfers fraud saw the highest YoY growth, up 113% from H1 2023 to H1 2024.”
However, promotion abuse, which is defined as consumers or fraudsters taking advantage of marketing offers to receive “unintended financial incentives, was the most common Digital Fraud type globally in H1 2024, with 3.6% of Digital Fraud reported to TransUnion by its customers.”
TransUnion came to its conclusions about Digital Fraud based on intelligence from its identity and fraud product suite that helps “secure trust across channels and delivers efficient consumer experiences – TransUnion TruValidate.”
The rate or percentage of “suspected” Digital Fraud attempts reflect those that TransUnion customers determined met one of “the following conditions: 1) denial in real time due to fraudulent indicators, 2) denial in real time for corporate policy violations, 3) determined to be fraudulent upon customer investigation, or 4) determined to be a corporate policy violation upon customer investigation —compared to all transactions it assessed for fraud.”