- Only 8 per cent increased awareness, consumer concern regarding sharing personal information remained significant at 91 per cent in Q2 2023, albeit down from 94 per cent last year.
- The study shows that there has been an accelerating rate of digital fraud in other sectors of the country, such as retail, financial services, telecommunications, travel & leisure, and communities
Digital fraud attempts are on the rise in the country with 80 per cent of Kenyan having been targeted in the first three months of year, a new TransUnion’s Consumer Pulse Survey has shown.
From the findings a notable 72 per cent of respondents who reported being targeted by digital fraud schemes successfully avoided falling victim. However, an additional 8 per cent were targeted and fell victim to these schemes.
The awareness of fraudulent schemes was significantly high; only 20 per cent of consumers reported being unaware of any fraud schemes targeted at them. The lack of awareness was lowest among the younger generations.
“In Q2 2024, vishing (fraudulent phone calls to extract data) emerged as the most prevalent scam as cited by 45 per cent of respondents, surpassing money or gift card scams at 44 per cent,” said TransUnion Kenya CEO Morris Maina.
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Digital Fraud Attempts
The Vishing scams increased by 5 per cent points in the first quarter of this year compared to 2023. Smishing, which involves fraudulent text messages targeting data extraction, was reported by 44 per cent, an increase of 4 per cent points from Q2 last year
Due to increased awareness, consumer concern regarding sharing personal information remained significant at 91 per cent in Q2 2023, albeit down from 94 per cent last year.
“Concerns about sharing personal information were prevalent across all generations,” the report states.
The survey has further revealed that the primary concerns among 81 per cent of Kenyans when it comes to sharing personal information are invasion of privacy, while 67 per cent fear identity theft.
About 26 per cent of Kenyans were weary on sharing their personal data due to unsolicited marketing communications. This was higher than the 17 per cent who were keen to escape the government surveillance.
“The data highlights the importance of addressing these concerns to encourage wider adoption and use of digital services among Kenyan consumers. Strengthening security protocols and increasing awareness about safe digital practices can help mitigate these fears, ensuring that consumers feel secure and confident in the digital space,” added Maina.
As the digital economy continues to grow, safeguarding personal information will be paramount in fostering trust and promoting the benefits of digital services across Kenya.
According to the TransUnion 2024 State of Omnichannel Fraud Report, in 2023, the country experienced a 10.2 per cent digital fraud rate in the online gaming sector.
Cybercriminals have resorted to the use of remote desktop protocol in executing their attacks on systems according to new findings by Sophos. [photo/courtesy]. [photo/courtesy]The report’s findings are based on proprietary insights from TransUnion’s global intelligence network, which was released yesterday.
Furthermore, the study shows that there has been an accelerating rate of digital fraud in other sectors of the country, such as retail, financial services, telecommunications, travel & leisure, and communities (online dating, forums, etc.).
“TransUnion found across industries in 2023, 3.3 per cent of all transactions where the consumer was in Kenya were flagged as being suspected Digital Fraud – a 16 per cent YoY decrease,” the study revealed.
TransUnion determined that 10.3 percent of Kenyan transactions during the Black Friday period (23 – 27 November 2023) were potentially fraudulent. This rate is 2.8 percent lower than the period between January 1 to 22 November) the same year.
About 10.3 per cent of e-commerce transactions from Kenya during the Black Friday period were suspected to be fraudulent compared to 9.3 per cent the rest of the year.
“Just as the festive season drives consumers online to start shopping for presents for their families, so does it become a hub for fraudsters aiming to take advantage of this seasons for their financial advantages,” said Steve Yin, global head of fraud at TransUnion.
Top singnal of fraudulent e-commerce transactions during the festive shopping season globally included transactions per IP, driven with an unusual capacity of activity from one single Internet Protocol (IP) address to a consumer’s site in a short period, and transactions per device, driven with an unusual capacity of activity from one single device to a consumer’s site in a short time.
“We hear reports that payment card providers tend to use a diverse model during festive shopping seasons to allow more authorisations to complete faster,” said Morris Maina, CEO at TransUnion Kenya. “It is clear that a similar wit is being used by retailers arguing that any alteration may drive consumers away, showing the hightened competition and aggressiveness of retailers to ensure massive shopping volume.”
Phone call from private callers late at night. Scam, fraud or phishing with smartphone concept. Prank caller, scammer or stranger. Man answering to incoming call. Hoax person with fake identity. [Photo/Ann Craft Trust]Criminal organisations look forward to this season of lax fraud controls. For smallscale traders that allow visitors checkouts, thieves will transact using stolen voucher cards they’ve bought from the dark web or have previously purchased from other data site attacks.
While digital sales contacts for retailers are now known, they will have to wait and hope that fraud losses do not pile up. traders will have to wait for an uptick in returns, and consumer disputes before that becomes clear.
The rate of suspected digital fraud attempts shows interactions that Transunite consumers either denied in real time due to fraudulent signs or determined to be fraudulent after a review process compared to all transactions it assessed for fraud.
“The upcoming festive seasons mark the biggest shopping period of the year for retailers, but putting in place the proper tools to discern fraud at the first attempt sign is a priority,” said Maina. “A crucial way to torndown fraudulent schemes while at the same time protecting legal ones involves putting in place holistic fraud measures that can verify consumer’s identity at the very beginning of a business deal, including both account creation and login.”
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