Digital fraud drops in Namibia

STAFF REPORTER - The rate of digital fraud originating from Namibia decreased in the first quarter of this year, with suspected online fraud attempts declining 7% from the same quarter last year, in line with the global decrease of 22.6% during that same time period.

Sectors such as telecommunications, travel and leisure, and retail saw decreases in the suspected attempted digital fraud rate from Namibia. Conversely, fraudsters in Namibia increased their suspected scams in sectors such as gambling and financial services.

“What we observed in Namibia and globally is that sophisticated fraudsters are shifting their focus to target new industries as sectors previously targeted have ramped up fraud prevention measures. In other words, fraudsters are constantly seeking out new opportunities based on vulnerabilities,” said Amritha Reddy, head of fraud at TransUnion South Africa.

“What’s critical is that companies don’t become complacent with fraud prevention measures as fraudsters become ever more sophisticated. At the same time, companies should leverage this temporary shift in fraudulent activity to focus on optimising customer experience without compromising security.”

INDUSTRIES

The telecommunications industry saw the largest year-on-year (y-o-y) decrease in the suspected fraud attempt rate for digital transactions coming from Namibia, at -39.1%.

When digital fraud in telecommunications did occur, TransUnion found the most dominant type in that industry globally was identity theft. This occurs where a customer uses a stolen identity to commit fraud, and the victim who is the identity owner is a real person.

Fraudsters have cycled through certain industries during the pandemic and are now rotating to other vulnerable sectors. This makes these vulnerable sectors more prone to digital fraud attempts.

The gambling industry exhibited the greatest y-o-y growth in the rate of suspected digital fraud coming from Namibia in this quarter at 109.1%.

The most prevalent type of fraud in that sector globally being promotion abuse – where a user abuses site promotions such as refer-a-friend, reload deposit bonuses and free giveaways.

The financial services industry experienced the second highest y-o-y increase in Namibia at 27.5%, where first-party application fraud was the most common type of fraud.

This occurs when an individual intentionally completes fraudulent applications that contain inaccurate or manipulated information with the intention of receiving a lower rate or better terms for a policy or contract.

FOCUS SHIFT

“As digital fraud rates stabilise in Namibia during a period when fraudsters are searching for new vulnerabilities, it’s important that organisations shift their focus to identifying more of the ‘good’ customers and transactions to drive revenue and customer lifetime value.

“By reducing false positives, false declines and manual review rates, organisations can improve their customer experience through trusted connections while still keeping the fraudsters at bay,” said Reddy.

TransUnion derived its conclusions on fraud against businesses on intelligence from billions of transactions and more than 40 000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate.

The percent or rate of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions that were assessed for fraud.