TransUnion Report Finds Digital Fraud Attempts Fall 18% in the Philippines but Rise 80% Globally From Pre-Pandemic Levels
Global information and insights company and the Philippines’ first comprehensive private credit reference agency TransUnion (NYSE: TRU) has today released a new 2023 State of Omnichannel Fraud Report that examines digital fraud trends and prevention strategies to enable trust in today’s omnichannel marketplace. The study showed that 4.6% of global digital transactions analysed were potentially fraudulent in 2022, which was largely in line with the rate seen in 2019. However, despite the easing of digital fraud rate back to the 2019 level, the volume of global digital fraud attempts increased considerably by 80% from 2019 to 2022, alongside a marked increase in global digital transactions during the same period.
In the Philippines, 8.7% of digital transactions were suspected to be fraudulent over 2022, the third highest among all countries and regions studied. However, when looking at the volume, the digital fraud attempts originating from the country decreased by 18% compared to pre-pandemic 2019.
“Despite the return to the pre-pandemic levels, the Philippines’ digital fraud rate still stands at a much higher level than the global average, leaving no room for complacency,” said Amrita Mitra, chief operating officer at TransUnion Philippines. “As fraudsters become increasingly sophisticated, businesses must continue to equip themselves with the proper tools to detect fraud at the first warning sign without inhibiting the consumer journey.”
Logistics tops the list of industries targeted by digital fraud in the Philippines
Globally in 2022, the gaming and retail industries saw the highest rate of suspected digital fraud at 7.5% and 7.2%, respectively. These were followed by video gaming at 5.4%, financial services at 4.2% and communities (i.e. online dating and forums) at 4%. However, the highest rate of growth globally since 2019 was observed in the travel & leisure industry. This sector saw a 117% increase in suspected digital fraud globally as more and more consumers looked to resume traveling following the pandemic period.
For transactions originating from the Philippines, the logistics industry saw a significant increase in suspected digital fraud, where it increased by 133% since 2019. The gaming and communities (online dating and forums) industries also experienced notable growth in digital fraud attempts, up 30% and 15%, respectively, over the same period.
Global and Philippine Digital Fraud Attempt Rate Change by Industry 2019-2022
Philippine suspected digital fraud attempt rate % change 2019-2022
Global suspected digital fraud attempt rate 2022
Global suspected digital fraud attempt rate % change 2019-2022
|Gaming (online sports betting, poker, etc.)|
|Communities (online dating, forums, etc.)|
|Travel & Leisure|
Source: TransUnion TruValidateTM
Majority of Filipinos encounter digital fraud schemes
The study found that a large percentage of people are being impacted by digital fraud attempts across a wide range of communications channels. In a TransUnion-commissioned consumer survey across 18 countries and regions globally, 52% of respondents indicated that they were targeted by digital fraud via email, online, phone call, or text messaging in the three months beginning September 2022.
Among Filipinos surveyed, 71% said they were targeted by digital fraud attempts across these communications channels, and 11% among all surveyed actually fell victim over this time period. Phishing (fraudulent emails, social posts, websites and QR codes) and smishing (fraudulent mobile text messages), both at 46%, were the most commonly reported fraud schemes experienced by Filipinos, followed by third-party seller scams at 33% and identity theft at 25%.
Consumers want their digital experience secure and convenient at the same time
Additional findings also showed that consumers expect businesses to protect their identities and online accounts. Globally, 63% of respondents indicated they want to be explicitly authenticated to access their online accounts. Most (70%) preferred to be authenticated once at the start of their online sessions. A clear majority (78%) said they prefer having multifactor authentication turned on all the time.
Similar observations were seen among Filipinos, with almost three quarters (72%) saying that they want to be explicitly authenticated to access their online accounts. Of those surveyed, 65% preferred to be authenticated once at the beginning of an online service, and a significant 84% preferred having multifactor authentication turned on at all times.
“Clearly, consumers want secure digital platforms where they can transact with confidence. That said, while they understand that protection entails authenticating themselves, they want a fast and convenient online experience. Businesses must recognize these consumer preferences and employ a strategy of continuous innovation through better data, analytics and technology to more accurately detect possible fraud, while at the same time delivering a friction-right digital experience for consumers,” said Mitra.
TransUnion came to its conclusions based on intelligence from its identity and fraud product suite TransUnion TruValidateTM that helps secure trust across channels and delivers efficient consumer experiences. The rate or percentage of suspected digital fraud attempts reflect those which TransUnion customers either denied in real time due to fraudulent indicators or determined were fraudulent after reviewing – compared to all transactions it assessed for fraud. Specific country and regional data in the report include Brazil, Canada, Chile, Colombia, Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, Philippines, Puerto Rico, Rwanda, South Africa, Spain, United Kingdom, United States and Zambia.
For more information and insights on global fraud trends, please download the 2023 State of Omnichannel Fraud Report.