Insurance becoming ‘ripe target’ for UK fraudsters as attempts up by 257% – TransUnion

The insurance industry has become a target for UK fraudsters with the rate of UK suspected digital fraud attempts up by 257%, according to the latest TransUnion study published today (18 August 2022).

Meanwhile, in financial services, the rate of suspected digital fraud attempts has more than doubled to 260% because fraudsters are capitalising on the digital acceleration seen during the Covid-19 pandemic.

TransUnion’s latest quarterly Consumer Pulse study of 1,004 adults conducted between 20 May to 1 June 2022 revealed that 30% of adults in the UK experienced digital fraud attempts and 3% of those fell victim in the last three months.

Overall, the rate of UK suspected digital fraud attempts was up by 32% in Q2 2022, compared to the second quarter of 2021.

The most common digital fraud type reported by insurance firms was first party application fraud – where policy holders provide inaccurate information to get lower rates or better terms.

Other industries also saw an increase in online fraud attempts originating in the UK, including telecommunications, retail and logistics.

Shail Deep, chief product officer at TransUnion UK, said: “In recent years, we’ve seen fraudsters routinely shift focus across industries, aligned to changing consumer habits and rapid digital acceleration.

“In particular, industries that have seen major shifts towards a digital user experience are ripe targets and that’s why financial services and insurance are experiencing such significant increases.

“Businesses across all areas must be vigilant and adopt advanced analytical tools that use global datasets to ensure robust fraud prevention and authentication processes.”

Phishing deemed top scam

Despite an increase in the UK, the global rate of suspected digital fraud attempts declined by approximately 14% year-on-year in Q2 2022.

The continuing cost of living pressure is encouraging some consumers to engage in fraudulent activity, said TransUnion.

Josh Gunnell, director of fraud and ID at TransUnion UK, said: “Mirroring recent industry figures, our data affirms that phishing remains the top type of digital fraud, accounting for 36% of attempts reported by consumers in Q2.

“This was followed by money or gift card scams (23%) and third-party seller scams (17%). Although long-established fraudulent activities continue to capture victims as well; 15% of respondents were targeted by card theft or fraudulent charges and 12% by attempted identity theft.

“Being able to link proprietary data, device identifiers and online behaviours and tap into a global network of reported fraud can help companies minimise the risk of fraud and confidently identify genuine consumers while maintaining an effective, personalised and friction-right experience.”