A recent analysis by TransUnion revealed that fraud continues to have a significant impact on businesses, leading to substantial financial losses. The H2 2024 Update to the State of Omnichannel Fraud Report showed that the exposure to synthetic identity lending for various types of loans in the U.S. has reached an all-time high. This poses a major risk to lenders and businesses across different industries.
A survey conducted by TransUnion among more than 800 business leaders in Canada, India, the U.K., and the U.S. found that total fraud losses accounted for 6.5% of their companies’ revenue, totaling around $359 billion. In the U.S. alone, businesses reported losing the equivalent of 6.7% of their revenue due to fraud, amounting to $112 billion. The survey also revealed that 75% of global respondents stated that different types of fraud either remained the same or increased year-over-year, with scam/authorized fraud being the most common cause of losses.
Steve Yin, the global head of fraud at TransUnion, emphasized the importance of protecting customers and businesses from fraud. He highlighted the need for organizations to adopt advanced fraud prevention technologies such as identity verification, IP intelligence, and synthetic identity detection to combat evolving fraud schemes effectively.
The analysis also showed that suspected digital fraud rates remained high, with 5.2% of all transactions globally being flagged as potentially fraudulent. The gaming sector in the U.S. experienced the highest rate of suspected digital fraud, with 13.3% of transactions in that industry being suspected of fraudulent activity.
The report further highlighted the increasing trend of lender exposure to synthetic identities, particularly in the auto loan industry. Exposure to synthetic identities for auto loans, bank credit cards, retail credit cards, and unsecured personal loans reached an all-time high in H1 2024, totaling $3.2 billion. The auto loan industry was the most affected by exposure to synthetic identities, posing a significant threat of charge-offs.
In addition, the report identified the communities industry, including online forums and dating sites, as the most impacted by digital fraud in H1 2024. Profile misrepresentation was reported as the most common type of fraud in this sector, leading to a rise in suspected digital fraud rates globally.
Synthetic identity fraud was identified as the fastest-growing type of digital fraud, increasing by 153% from H2 2023 to H1 2024. Electronic fund transfer fraud also saw a significant year-over-year growth of 113%. Promotion abuse, where consumers exploit marketing offers for financial gain, was the most common type of digital fraud globally in H1 2024.
TransUnion’s insights into digital fraud were based on data from its TruValidate product suite, which helps secure transactions and prevent fraud across different channels. The company emphasized the importance of leveraging advanced fraud prevention tools and technologies to protect businesses and consumers from evolving fraud threats.
For more detailed information and insights on global fraud trends, you can download the full report from TransUnion’s website. If you suspect that you have been a victim of fraud, resources and assistance are available to help you address the situation promptly.
