Digital payments fraud on the rise in the UK
By Puja Sharma
The continuous growth of eCommerce has increased the risk of digital fraud and the need to mitigate fraud attempts by putting advanced authentication processes in place. Three in 10 UK consumers said they prefer using one-time passcodes for authenticating their identity when opening a new online account.
According to TransUnion’s 2022 ‘Global Digital Fraud Trends Report’, 42% of UK consumers say they have been targeted by online fraud in the past three months.
Among those targeted, the five most common scams faced were phishing (46%), third-party seller scams on legitimate online retail websites (25%), stolen credit card or fraudulent charges (23%), and account takeover (20%), and identity theft (15%).
TransUnion monitors digital fraud attempts reported by businesses in industries such as finance, retail, telecommunications, government, and insurance, among others. The conclusions in its report 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.
Digital acceleration in the age of Covid-19
The continuous growth of e-commerce has increased the risk of digital fraud and the need to mitigate fraud attempts by putting advanced authentication processes in place. Three in 10 UK consumers said they prefer using one-time passcodes for authenticating their identity when opening a new online account.
Such widespread technology adoption has led to high consumer expectations in terms of both experience and security, with 67% of UK consumers saying they have abandoned an online application or form before completing it. Among the top reasons they say they did so is they felt the process was frustrating (52%) or too much information was required (51%). Additionally, over six in 10 (63%) UK consumers say they wouldn’t return to a website if they had a fraud concern or experienced a slow website (41%)
As per the UK finance authorised push payment (APP) fraud losses were £355.3m, an increase of 71%, including Purchase scams: with online retail growing, purchase scams were the most common form of authorised push payment (APP) fraud, accounting for almost half of all APP cases.
Martin Wilson, CEO of Digital Identity Net, said: “Being online is the new Wild West with most of us not knowing where our personal information goes or how it is used. As a result, digital fraud has increased exponentially with 5.1 million offenses reported in the year ending September 2021. It’s a major problem, particularly in the payments space where there was a 71% increase in authorised push payment (APP) in the first half of 2021 and, for the first time, the amount of money stolen through APP fraud overtook card fraud losses.
“While there have been positive steps in recent months such as the introduction of Strong Customer Authentication requirements and the inclusion of online scams in the Online Safety Bill, the government can’t tackle this issue alone. It needs to work with technology providers, anti-fraud experts, regulators, security specialists, and financial institutions to build an effective and safe digital framework to protect people from financial scams.”
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