It Is Quieter on the HK Digital Fraud Front

Digital fraud attempts from Hong Kong have decreased significantly compared to the global average, with businesses in the city taking better control against fraudsters.

According to TransUnion's quarterly fraud analysis, the rate of suspected digital fraud attempts originating from Hong Kong declined 26% across almost all industries tracked during the second quarter of 2022. This is a significant drop compared to the 14% decline shown globally.

The sectors that experienced the biggest declines in digital fraud attempts were gaming (-59%), communities (-48%), and retail (-46%). The gambling and financial services sectors were the only ones to see small increases (2% each).

“Over the past two years, we’ve generally seen rates of digital fraud increase as consumers increased their use of digital channels. However, it’s good to see the digital fraud rate for transactions originating from Hong Kong decrease in the last couple of quarters, which could show that businesses are taking effective preventive measures against digital fraud,” said Jerry Ying, chief product officer of TransUnion APAC.

In TransUnion's Consumer Pulse Survey, 1,006 Hong Kong adults were asked about their experiences with digital fraud in the last three months. Of the total number of respondents, 32% said they had been a target of phishing scams (41%), money/gift card scams (21%), and stolen credit card/fraudulent charges (21%).

This is a marked improvement from Q1 2022 when 38% of survey respondents said they had been targeted by digital fraud.

“We’ve known for a long time that fraudsters follow the money and target where it is being spent. With people staying at home more during the pandemic, illegal online gambling helped fill the entertainment void for many consumers, which is particularly prone to fraudsters’ attention and has been a consistent tendency. At the same time, another pandemic trend has been consumers being more conscious about savings, investments, and household finances. The data shows that these sectors remain a target for fraudsters.”

Ying added that the focus across the industry has been identifying more good transactions and allowing them to pass with less friction. “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.”

TransUnion gathers data on fraud against businesses from billions of transactions and more than 40,000 websites and apps in its flagship identity proofing, risk-based authentication, and fraud analytics solution suite – TransUnion TruValidate™.

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