Digital frauds rising since Covid outbreak: Report

In India across industries, TransUnion found that the highest share of suspected digital fraudulent transactions originated from Mumbai, Delhi and Chennai.

Attempts and incidences of digital fraud have been increasing since the beginning of the Covid-19 outbreak, credit bureau TransUnion said in a report on Thursday, based on its latest quarterly analysis of global online fraud trends. A separate report by fraud data insights start-up TrustCheckr said that 41% of digital frauds in India occurred in the eastern region.

TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions and more than 40,000 global websites and apps contained in its fraud analytics solution suite. These websites and apps have traffic coming from all countries.

The bureau found that the percent of suspected fraudulent digital transaction attempts against businesses originating from India increased 28.32% when comparing the period between March 11, 2019 and March 10, 2020 with the period between March 11, 2020 and March 10, 2021.

“Fraudsters are always looking to take advantage of significant world events. The COVID-19 pandemic and its corresponding rapid digital acceleration brought about by stay at home orders is a global event unrivalled in the online age,” said Shaleen Srivastava, executive vice president and head of fraud solutions at TransUnion in India. By analysing billions of transactions globally, TransUnion screened for fraud indicators over the past year, and this revealed that the war against the virus has also brought about a war against digital fraud, he added.

In India across industries, TransUnion found that the highest share of suspected digital fraudulent transactions originated from Mumbai, Delhi and Chennai.

TrustCheckr in its report said that the most number of Unified Payments Interface (UPI) scams take place on payment apps and market places, with 41% of fraud distribution accounted for by the eastern parts of India and the states of West Bengal, Odisha, Bihar, Assam, Kashmir, Arunachal Pradesh, Meghalaya, Tripura, Nagaland, Mizoram, Manipur, Himachal Pradesh and Sikkim. The top frauds take place in KYC, fake cash-back, frauds through digital wallets, fake-selling, QR codes, UPI phishing, lottery scams and financial fraud on social media.

“Insights into the survey reveal that the top scamsters were from Patna, Chandigarh, Kolkata and Meerut for one of the top payment apps at 15%. Most QR code scams originate from Assam, accounting for 20% of the total distribution,” TrustCheckr said.

The company observed that many fraudster profiles claimed to be army men. This was most likely the result of border clashes between India and China due to which there was an upsurge in patriotic sentiments among the general public and the fraudsters looked to cash in on the sentiment by playing the emotional card.  In QR code frauds, most fraudsters posed as army men selling something on marketplaces.

With the pandemic having pushed people to lean further towards contactless payments, a lack of awareness and vulnerabilities in confidential card details are increasing digital frauds. TrustCheckr identified over 1 million frauds together in business-to-business (B2B) and business-to-consumer (B2C) segments in the last 15 months – 25% scams in KYC and 20% in QR codes, while B2B scams were largely done with 30% fake identities and 25% synthetic identity frauds. TrustCheckr’s findings are based on 350,000 data points collected from top hashtags, 200+ Twitter handles, partner data shared over the last 12 months and its proprietary social scanning technology.