TransUnion Studies: Fraudsters Focused on Travelers, Gaming; and COVID-19 Schemes

Source: TransUnion

By Roy Urrico

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Scammers shifted focus in mid-2021 from financial services to travel and leisure, and other industries; and more than a third of consumers suffered COVID-19 related digital fraud. Those are findings in two separate studies from Chicago-based information and insights company TransUnion.

For its quarterly analysis, TransUnion monitors digital fraud attempts reported by businesses in varied industries, such as financial services, gambling, gaming, healthcare, insurance, retail, and travel and leisure, among others. The conclusions are based 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.

Shai Cohen. TransUnion

“It is quite common for fraudsters to shift their focus every few months from one industry to another,” said Shai Cohen, senior vice president of Global Fraud Solutions at TransUnion. “Fraudsters tend to seek out industries that may be seeing an immense growth in transactions. This quarter, as countries began to open up more from their COVID-19 lockdowns and travel and other leisure activities became more mainstream, fraudsters clearly made this industry a top target. The immense growth in gaming fraud also can be attributed to the shifts in focus of fraudsters as this growing market becomes a larger target.”

The sudden shift in focus of fraudsters impacts financial services in a way. Global financial services online fraud attempt rose 149% compared to the first four months of 2021 and the last four months of 2020. However, when comparing the second quarter of 2021 with the second quarter of 2020, the rate of suspected online financial services fraud attempts still climbed, but at a much lower rate of 18.8% globally and 38.3% in the U.S.

Across industries, the rate of suspected digital fraud attempts rose 16.5% globally when comparing the second quarter 2021 with the same quarter of 2020. In the U.S., the percentage of digital fraud attempts increased at a similar rate (17.1%) during the same time period. Gaming and travel and leisure were the two most impacted industries globally for the suspected digital fraud attempt rate, rising 393 and 155.9% in the last year, respectively. In the U.S., this rate rose 261.9% for gaming and 136.6% for travel and leisure.

Fraudsters are also quickly adapting to target desperate travelers. Recently, the U.S. State Department temporarily shut down its online booking system for all urgent passport appointments in response to a group of scammers using bots to book all available appointments and sell them for as high as $3,000 to applicants with urgent travel needs.

Melissa Gaddis, TransUnion

“We are seeing because of the reopening of the economy, people have more disposable income,” said Melissa Gaddis, senior director of customer success, Global Fraud Solutions at TransUnion. “We are seeing significantly more traffic in some of those industries where you'd need disposable income, specifically the travel and leisure and the gaming industries. And because we are seeing so much more transactions there's of course, opportunities for fraudsters.”

It does not mean financial institutions are off the hook, they are just not the only mark. Targeting credit unions and banks is always a lucrative business for fraudsters because of what they can do with the Personally identifiable information (PII), noted Gaddis. Even though fraudsters now also target the gaming and travel industries, the primary fraud perpetuated is credit card fraud, which still falls back on financial institutions.

More than One of Three Become Pandemic Targets