While the Covid-19 pandemic has led to an increase in digital payments and dependence on the digital economy, there has also been a rise in fraudsters’ digital schemes against businesses. According to American consumer credit reporting agency TransUnion, the rate of digital fraud attempts originating from India against businesses was up by 28.3% when compared to pre-pandemic levels. In its latest quarterly analysis of global online fraud trends, the agency also found that since the outbreak of the Covid-19 pandemic, incidents of identity fraud were also reported to be over 30% higher as compared to global levels.
TransUnion studied billions of transactions and more than 40,000 global websites and apps that have traffic coming from countries across the globe.
“Fraudsters are always looking to take advantage of significant world events. The Covid-19 pandemic and its corresponding rapid digital acceleration brought about by stay at home orders is a global event unrivalled in the online age,” says Shaleen Srivastava, executive vice president and head of fraud solutions at TransUnion in India.
“By analysing billions of transactions globally we screened for fraud indicators over the past year; it has become clear that the war against the virus has also brought about a war against digital fraud,” he adds.
Last year, cybersecurity solutions provider Kaspersky had pointed out that as India’s digital economy continues to grow, cyber frauds are likely to continue well into 2021 and beyond.
“With more users connected to the Internet, the incidents related to frauds may see an uptick. In terms of cybersecurity for businesses, Kaspersky advises strengthening of security infrastructure as more small and medium businesses go digital. Medium, small, and micro enterprises (MSMEs) must be vigilant in terms of their overall security setup,” Kaspersky had warned.
The Moscow-based maker of popular anti-virus software had further argued that many recent instances of cybersecurity breach were due to a vulnerable Internet-facing service. “Apart from securing their infrastructure, they [businesses] have to take essential steps to protect their customers’ personal information. Any loopholes in the setups may provide attackers with an opportunity to go after MSMEs,” Kaspersky had said.
TransUnion’s report has also found that the highest percentage of suspected digital fraudulent transactions originated from Mumbai, Delhi, and Chennai. With more people shopping online during the pandemic, more goods are being shipped. This is why fraudsters are either redirecting genuine orders or, alternatively, placing fraudulent orders with compromised consumer accounts to genuine customer addresses, and then redirecting them once shipped, the report pointed out.
Suspected frauds in the logistics sector were up 224% while those in the telecommunications industry were up by 200% in India. Financial services-related frauds, including identity theft, grew by 89%, while profile misrepresentation frauds originating from online communities like online dating went up by 11%. However, certain industries also saw a decline in suspected digital fraud attempt rate. Travel and leisure, for example, saw a 45% drop while retail reported a 22% decrease as compared to pre-pandemic levels.
“Despite the rising level of attempted fraud globally, consumers demand businesses both protect their transactions and still maintain convenient digital experiences. The businesses that come out on top will be those that successfully balance both,” Srivastava says.