Digital Fraud Attempts Coming From South Africa the Highest in Telecommunications

• In the first half of 2024, nearly 5% of all attempted digital transactions originating in South Africa were suspected to be Digital Fraud
• Six in 10 South Africans said they were recently targeted by fraud
• Suspected Digital Fraud attempts coming from South Africa in telecommunications was the highest among industries analysed in the first half of 2024

In the first half (H1) of 2024, 4.9% of all attempted digital transactions where the consumer was located in South Africa were identified as suspected Digital Fraud in a recent TransUnion analysis. TransUnion also determined telecommunications, financial services and communities (online dating, forums etc) were the industries that had the highest suspected Digital Fraud rate for transactions where the consumer was in South Africa during the analysis period.

South Africa had the eighth highest rate of suspected Digital Fraud in the first half of 2024 out of the 19 countries where TransUnion provided regional breakdowns in its analysis. This is at a time when about six in 10 (59%) South African consumers said in Q2 2024 that they were targeted by email, online, phone call or text messaging fraud in the past three months^[1], increasing to 60% in Q3 of this year^[2].

Some of these findings are in the newly released TransUnion^® (NYSE: TRU) H2 2024 Update to the State of Omnichannel Fraud Report, which explores fraud trends in the first half (Jan. 1-Jun. 30) of this year. It found that some industries were particularly targeted, even though Digital Fraud affects many industries in South Africa.

“Despite the good-faith efforts that are being made by global organisations to identify and prevent fraud to date, fraudsters continue to evolve. In that sense, businesses should ensure that they are taking advantage of fraud prevention technologies such as identity verification, IP intelligence, device reputation and synthetic identity detection as critical components of their fraud prevention programs,” says Amritha Reddy, senior director of fraud solutions at TransUnion South Africa.

Table 1: Industries with the Highest Rate of Suspected Digital Fraud Attempts Where the Consumer was in South Africa in H1 2024

Source: TransUnion TruValidate™

The communities industry experienced the largest percentage (11.5%) of suspected Digital Fraud globally in H1 2024, according to data in TransUnion TruValidate. Globally, TransUnion’s communities customers reported profile misrepresentation (where a user posts inaccurate information in a profile and/or uses bogus profile photos) as the most frequent type of Digital Fraud they witnessed in H1 2024. Communities was the industry with the highest suspected Digital Fraud rate in seven of the 19 countries and regions for which TransUnion provided breakdowns in H1 2024.

New Account Fraud Risk Threatens Digital Experiences

Digital fraud can occur at different steps in a customer’s transaction process, and more than two-thirds of business leaders surveyed by TransUnion indicated that at least 25% of their organisation’s new account openings are done online, with more than a third saying that it was 51% or more^[3]. In South Africa, 5.1% of attempted digital account logins were suspected of Digital Fraud, with 2.9% of digital account opening attempts being suspected of Digital Fraud.

TransUnion also determined synthetic identity fraud (the use of personally identifiable information or PII to fabricate a person or entity in order to commit a dishonest act for personal or financial gain) was the fastest growing Digital Fraud type volume-wise reported to TransUnion by its customers from H2 2023 to H1 2024, increasing 153%. Electronic fund transfers (also known as ACH/debit payments) fraud saw the highest YoY volume growth, up 113% from H1 2023 to H1 2024. However, promotion abuse (consumers or fraudsters taking advantage of marketing offers to receive unintended financial incentives) was the most common Digital Fraud type globally in H1 2024, accounting for 3.6% of all Digital Fraud reported to TransUnion by its customers.

About the Analysis

TransUnion came to its conclusions about Digital Fraud based on intelligence from its identity and fraud product suite that helps secure trust across channels and delivers efficient consumer experiences – TransUnion TruValidate. The rate or percentage of suspected Digital Fraud attempts reflect those that TransUnion customers determined met one of the following conditions: 1) denial in real time due to fraudulent indicators, 2) denial in real time for corporate policy violations, 3) determined to be fraudulent upon customer investigation, or 4) determined to be a corporate policy violation upon customer investigation —compared to all transactions it assessed for fraud. 

Download the TransUnion H2 2024 Update to the State of Omnichannel Fraud Report to learn more. Specific country and regional data in the report include South Africa, Botswana, Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, Spain, the United Kingdom, United States, and Zambia.

^[1] TransUnion Q2 2024 Consumer Pulse survey of 911 South African adults between May 1–13, 2024.

^[2] TransUnion Q3 2024 Consumer Pulse survey of 952 South African adults between July 16-31, 2024.

 ^[3] TransUnion business survey of 801 business leaders from May 14–29, 2024