Digital fraud coming from Kenya drops by 27% in Q2, TransUnion report
The rate of suspected digital fraud attempts from Kenya in Q2 2022 decreased by -27% compared to the same period last year, compared to a -14% decline shown globally. TransUnion’s (NYSE:TRU) quarterly fraud analysis showed that the rate of suspected digital fraud attempts originating from Kenya declined across half of the industries tracked.
TransUnion’s data on fraud against businesses is 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™.
The global insurance industry saw a year-on-year (YoY) suspected digital fraud attempt rate increase of 159% in Q2 2022, while the global logistics sector increased by 13%. In contrast, TransUnion observed a -20% decrease in the rate of suspected digital fraud attempts in insurance worldwide for transactions originating from Kenya. The most common type of fraud reported to TransUnion by its insurance customers in Q2 2022 was first-party application fraud, which involves fraudulent applications containing intentionally inaccurate information with the intention of receiving certification, lower rates or better terms for a policy/contract.
“We have observed interesting trends in the first half of 2022 with suspected fraudulent activity in the insurance industry continuing to be elevated,” said Shai Cohen, senior vice president of global fraud solutions at TransUnion. “In recent years, we’ve seen fraudsters shift their industry focus each quarter. At this time, we believe the insurance industry is seeing more ‘soft fraud’ because some consumers may be representing their policies incorrectly in an effort to save money, especially in a high inflation environment that places more pressure on their wallets.”
In Kenya, the rate of suspected digital fraud across all industries decreased 27% YoY in Q2 2022. TransUnion observed the largest declines from Kenya-based transactions in communities (which include online forums and dating) (-70%), telecommunications (-42%) and insurance (-20%).
The industry that saw the biggest increase in the rate of suspected digital fraud attempts coming from Kenya was logistics, which increased 61% during that period. The most common fraud reported to TransUnion by its logistics customers in Q2 2022 was shipping fraud, where buyers spoof shipping addresses, or a seller receives payment for goods or services, but never ships the goods to the buyer. Other industries with increases coming from Kenya were gambling (36%) and retail (23%).
“The focus across industry has been on identifying more of the good transactions and customers to allow them to pass with less friction,” said Amritha Reddy, Head of Fraud at TransUnion Africa. “Strong fraud and authentication practices decrease false positives and focus fraud-fighting resources on the minority of interactions that warrant scrutiny. By reducing the pool of manual reviews and customer interrogations, organizations can dramatically reduce costs, increase revenue, and improve the overall customer experience.”
