Transunion 2024 State of Omnichannel Fraud Report

Fraud continues to rise globally, with cybercriminals exploiting the rapid growth of digital transactions. TransUnion’s 2024 State of Omnichannel Fraud Report highlights alarming trends in identity theft and synthetic identity fraud, driven by increasing digital transaction volumes. The report shows that fraudsters are using stolen personal information to commit account takeover (ATO), create synthetic identities, and perpetrate both third-party and first-party fraud, resulting in record-high data breaches and fraud cases in 2023.

Data breaches in the U.S. reached unprecedented levels, with a 15% year-over-year (YoY) increase in breach volume. Third-party service providers became a primary target for cybercriminals, with a 38% increase in third-party breaches, making them the largest breach vector in 2023. These breaches are a precursor to future fraud, as criminals exploit stolen credentials to carry out fraud schemes. Synthetic identity fraud, where criminals use a mix of real and fake information to create fraudulent identities, grew by 21% globally, reaching its highest levels since 2019.

Consumers are increasingly concerned about fraud risks, with 65% citing fraud concerns as the top reason they would avoid returning to a site. More than half of consumers (54%) reported being targeted by fraudulent email, online, or phone scams in the last three months, with many abandoning online transactions due to security fears. Trust and safety are critical, with 59% of consumers indicating they would switch to another company offering a better, safer digital experience. Organisations that fail to secure omnichannel experiences risk losing customers as fraud awareness grows.

The retail sector experienced the highest rates of suspected digital fraud, with 8.7% of all transactions flagged as potentially fraudulent. Fraudulent transactions in retail grew by 34% year-over-year, with promotion abuse being a common form of fraud. Gaming and online gambling platforms also faced high fraud rates, particularly in markets such as Colombia, Spain, and the U.S.

South African Statistics: A Growing Concern
The 2024 State of Omnichannel Fraud Report also provides insights into fraud trends in various global markets, including South Africa. Among the 19 countries analysed, South Africa reported a suspected digital fraud rate close to the global average of 5%, placing it alongside countries like Namibia and Botswana in terms of fraud exposure. However, there are concerns that these figures may be underreported. Cybercrime experts have suggested that the actual rate of fraud in South Africa could be significantly higher, given the country's ongoing struggles with cybercrime and data breaches.

While reported fraud rates in South Africa seem moderate, the true scale of fraud may be hidden by underreporting and inadequate fraud detection systems in the country.

South Africa’s relatively high digital adoption, combined with limited cybersecurity infrastructure, makes it an attractive target for fraudsters. While reported fraud rates seem moderate, the true scale of fraud may be hidden by underreporting and inadequate fraud detection systems in the country. As digital fraud continues to grow, South African businesses and consumers face increased risks, particularly as third-party breaches and synthetic identity fraud rise globally.