Suspected Digital Fraud Originating from Canada Soars in 2023; Canada with Third Highest Increase in Fraud Rates Among 19 Countries Analyzed by TransUnion

Key Findings:

• 39% growth in the rate of suspected digital fraud attempts year-over-year (YoY) for transactions originating from Canada in 2023.
• 60% of Canadians surveyed said they were recently targeted with fraud, of which 10% fell victim.
• 93% said having confidence their personal data will not be compromised is important when choosing who to transact with online.
• 42% said they abandon their online shopping carts due to fraud and/or security concerns.
• 8.4% of e-commerce transactions in 2023 were targeted by suspected fraud attempts originating from Canada.
• 202% increase in the volume of suspected digital fraud attempts from Canada between 2019-2023.
• 258% increase in the rate of suspected digital fraud attempts originating from Canada within telecommunications sector from 2022-2023.

TORONTO, Feb. 21, 2024 (GLOBE NEWSWIRE) -- Canada experienced a significant increase in suspected digital fraud attempts in 2023, with more than 5% of all transactions where the consumer was located in Canada being targeted by suspected fraud, revealed a new data analysis from TransUnion (NYSE: TRU). While the rate of suspected digital fraud grew YoY globally by 8% from 2022-2023, Canadian-based fraud significantly outpaced the global rate with a 39% increase in 2023 from 3.6% in 2022. Canada had the fifth highest rate of suspected digital fraud and the third highest rate increase from 2022-2023 out of the 19 countries analyzed.

The pivot to increasingly digital transactions since the beginning of the pandemic means Canadians face a new norm when it comes to the elevated severity and volume of attempted digital fraud rates. At the same time, the number of digital transactions has markedly risen in the last few years, further fuelling the volume of potentially fraudulent activity with a 202% increase in suspected digital fraud attempts originating from Canada from 2019-2023. The rate of suspected fraudulent digital transactions also increased during this same period by 105%.

“Digital fraud attempts from Canada grew dramatically over the past year across most industries. As the world accelerated digital engagement, fuelled by the pandemic, Canadian consumers and businesses face a new norm with significantly elevated fraud risks,” said Patrick Boudreau, head of identity management and fraud solutions at TransUnion Canada. “Canadian businesses and consumers are challenged to remain one step ahead of these increasingly sophisticated and ever evolving fraudsters. Fraudsters continue to prey on organizations that have direct access to money, products or services with easily transferable monetary value. There is no doubt that fraud remediation will continue to be a key priority for organization and businesses.”

Top Industries Targeted by Suspected Digital Fraud from Canada Include Retail, Communities, Video gaming, Gambling and Financial Services.
In 2023, the retail sector experienced the highest rate of suspected digital fraud, with just over 8 in every 100 transactions (8.4%) where the consumer was located in Canada being suspected fraudulent. The rate of suspected digital fraud in 2023 (the number of fraudulent transactions divided by all transactions in that industry) originating from Canada for all industries analyzed were:

• Retail: 8.4%
• Communities (online dating, forums, etc.): 6.2%
• Video gaming: 4.6%
• Gambling: 4.0%
• Financial services: 3.1%
• Telecommunications: 2.7%
• Insurance: 2.5%
• Travel and leisure: 0.6%
• Logistics: 0.4%

Significant Increase in Rate of Suspected Digital Fraud Across Multiple Sectors.
Increased suspected digital fraud rates originating from Canada spanned every industry except one analyzed. The telecommunications industry saw the most significant increase with a 258% jump from 2022-2023; followed by communities at 129%; and financial services at 75%. The only industry without an increase was logistics, which experienced a decline of 34%.

Suspected Digital Fraud Attempts Shift to New Industries Globally vs. Canada

Fraud Concerns have Strong Influence over Who Canadians Choose to do Business with and make Purchases from.
TransUnion survey data from December 2023 shows that Canadians’ fraud risk and security concerns have significant influence over who they choose to do business with. This includes:

• 42% of Canadians abandon their online shopping carts due to fraud and/or security concerns.
• 71% will not return to a website if they have fraud concerns.
• 93% of Canadians said having confidence their personal data will not be compromised is important when choosing who to transact with online.
• 34% of Canadians have switched their online transactions to another website due to fraud or security concerns.
• 46% of Canadians said that security of their personal data was the number one consideration when deciding what online company to do business with.

Canadians Report Being Targeted by a Diverse Mix of Fraudulent Schemes.
In the same December 2023 survey, 60% of Canadians surveyed said they were targeted with online, email, phone call or text messaging fraud in the last three months, of which 10% fell victim. Of those who said they were targeted, Canadians reported a diverse mix of fraudulent schemes including:

• Phishing (fraudulent emails, websites, social posts, QR codes, etc., to steal data): 50%
• Smishing (fraudulent text messages intended to trick the victim into revealing data): 43%
• Vishing (fraudulent phone calls intended to trick the victim into revealing data): 38%
• Third-party seller scams on legitimate online retail websites: 22%
• Identity theft (personal information like name, address, phone number or security number was stolen in a company’s data breach): 14%
• Social engineering scam (solicited to transfer or move illegally acquired money on behalf of someone else): 18%
• Stolen credit card or fraudulent charges: 14%
• Money mule scam (solicited transfer or move illegally acquired money on behalf of someone else): 12%
• Account takeover (online account used without permission): 11%
• Unemployment fraud: 6%

The Most Suspected Digital Fraud Occurs at Account Creation.
In reviewing the different points in a consumer journey, the data analysis reveals that the highest percentage of digital fraud occurs at account creation.

Globally, the analysis found that 13.9% of all digital account creation activity involved suspected fraud in 2023. For digital transactions where the consumer was in Canada, the suspected fraud rate at account creation was 4.9% last year. In comparison, the rate of suspected digital fraud at account login in Canada was 3.9% in 2023 (2% globally). When money is being exchanged in the transaction for instance for purchases, transfers, deposits and withdrawals, 2.3% of those types of transactions from Canada were suspected fraudulent (3.6% globally).

For the latest fraud trends and insights, please click here.

About the Analysis
TransUnion came to its conclusions based on proprietary insights from billions of transactions in its global intelligence network and a recent global consumer survey.

The rate or percentage of suspected digital fraud attempts reflect those which TransUnion customers either denied in real time due to fraudulent indicators or determined were fraudulent after reviewing — compared to all transactions it assessed for fraud. The country and regional analyses examined transactions where the consumer or suspected fraudster was located in a select country and region when conducting a transaction. The global statistic represents every country worldwide and not just the select markets.

This online survey of 13,923 adults was conducted December 5-23, 2023 by TransUnion with Dynata, a third-party research provider. Adults 18 years of age and older residing in 18 countries (Brazil, Canada, Chile, Colombia, the Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, the Philippines, Puerto Rico, Rwanda, South Africa, Spain, the UK, the US and Zambia) were surveyed using an online research panel method across a combination of desktop, mobile and tablet devices. Survey questions were administered in Chinese (Hong Kong), English, French (Canada), Portuguese (Brazil) and Spanish (Colombia, the Dominican Republic, Mexico, Puerto Rico and Spain). To ensure representativeness across resident demographics, the survey included quotas to balance responses across key demographics like age, gender and income.

The 2024 State of Omnichannel Fraud Report will be available on TransUnion’s website in late March.

About TransUnion® (NYSE: TRU)  
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries, including Canada, where we’re the credit bureau of choice for most of Canada’s largest banks. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this by providing an actionable view of consumers, stewarded with care.  

Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.

For more information visit: www.transunion.ca 

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