Hong Kong consumers and businesses are the most popular targets for fraudsters seizing upon increased rates of digital payments, according to data from American consumer credit reporting agency TransUnion.
For Hong Kong consumers monitored by the company, the ratio of digital transactions flagged for suspected fraud was about 18 per cent for the first half of 2023, higher than any other region, while the overall volume of suspected fraudulent transactions increased 57 per cent over the same period.
“The increasing acceptance of digital services and prevalence of spam calls has significantly contributed to the growth in fraud loss [in Hong Kong],” said Jerry Ying, chief product officer at TransUnion Asia-Pacific, in a release related to the findings.
The TransUnion report is based on proprietary information from its fraud solution service TruValidate, and includes data from over one billion individual consumers across more than 30 countries.
The rate of suspected digital fraud was based on interactions in which TransUnion users were either denied a transaction in real time due to fraudulent indicators or where transactions were found to be fraudulent after a manual review process, as opposed to all assessed transactions.
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The company also released a survey that found that 6 per cent of professional Hong Kong respondents had fallen victim to fraud in Hong Kong between April and July, while 32 per cent of respondents reported that they had been targets of unsuccessful fraud attempts.
Among those targeted by fraud in the same period, fraudulent phone calls meant to trick people into revealing data was the most prevalent fraud scheme, followed by phishing emails, websites and social posts.
For transactions originating in Hong Kong, the suspected digital fraud rate on transactions related to the travel and leisure sector had the highest of all industries at about 8 per cent. The sector also recorded the highest rate of digital payment growth since last year, with the city fully opening up to travel again in the wake of the pandemic, according to the TransUnion report.
Meanwhile, suspected fraud attempts related to transactions made in relation to online communities, such as online dating and forums, were found to be around 5 per cent, with most fraud within this space associated with profile misrepresentation.
Globally, retail, video gaming and telecommunications related digital transactions saw the highest rates of suspected digital fraud in the first half of the year, the report added.
According to Ying, with digital payments becoming more common, consumers are increasingly reliant on online platforms to step up their protection measures against fraud and to proactively identify suspicious accounts.
“In response, businesses regardless of their industry, shall allocate sufficient resources towards enhancing their data, analytics, and technological capabilities to identify potential fraud in a more accurate and efficient manner,” he added.