Digital Fraud Attempts Coming from Kenya the Highest in Retail

• In the first half of 2024, 4.6% of all attempted digital transactions originating in Kenya were suspected to be Digital Fraud Suspected
• Digital Fraud attempts coming from Kenya in retail was the highest among industries analysed in the first half of 2024

  Kenya had the 10th highest rate of suspected Digital Fraud in the first half of 2024 out of the 19 countries and regions for which TransUnion provided regional breakdowns.

In the first half (H1) of 2024, 4.6% of all attempted digital transactions where the consumer was located in Kenya were identified as suspected Digital Fraud in a recent TransUnion® (NYSE:TRU) analysis.

TransUnion also determined that retail, gaming, and communities (online dating, forums etc.) were the industries that had the highest suspected Digital Fraud rate for transactions where the consumer was in Kenya during the analysis period.

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

This is at a time when 80% of Kenyan consumers said in Q2 2024 that they were targeted with online, email, phone call or text messaging fraud attempts in the last three months, and of those consumers only 8% reported falling victim.^[1]

“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,” said Amritha Reddy, senior director of fraud solutions at TransUnion Africa.

Table 1: Industries with the Highest Rate of Suspected Digital Fraud Attempts Where the Consumer was in Kenya 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. [2] For transactions where the consumer was in Kenya, 4.8% of digital account login attempts were suspected of Digital Fraud, with 4.8% of digital account opening attempts also being suspected of Digital Fraud in H1 2024.

“Digital Fraud waxes and wanes, but the trends in cybercrime and consumer scams are clear,” said Morris Maina, CEO of TransUnion Kenya. “Now and in the future, organisations face more sophisticated cybercriminals weaponizing identity data at scale to perpetuate first- and third-party fraud schemes.

Fraud prevention is a necessary investment that needs to be as efficient as possible, using better data and risk signals, advanced analytics, and integrated technology, without increasing lost business and additional expense from false positives.”

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 globally 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 worldwide, 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.