Suspected e-commerce fraud has gone up by 42 per cent in Kenya ahead of Christmas, TransUnion survey reveals

A new finding by TransUnion released on Monday has revealed that fraudulent e-commerce transaction emanating from Kenya went up by 42 per cent in the period leading to the Christmas holidays compared to last year.

But the report by the Global information and insights firm shows possibly fraudulent dealings initiating from Kenya were 15 per cent lower in November 24-28 compared to the rest of the year.

For transactions originating from the country, according to the findings, 5.4 per cent of e-commerce transactions during that same period were suspected to be fraudulent.

TransUnion says these findings were based on intelligence gathered from billions of transactions contained in its TruValidate™ fraud analytics solution suite.

The analysis showed that the average number of suspected digital fraud attempts on any given day during that holiday period worldwide witnessed an 82 per cent hike compared to the rest of the year (January 1- November 23, 2022).

Risky Transactions

The said study also revealed the share of risky digital transactions for each individual day in the holiday shopping season for transactions in Kenya and worldwide.

Breakdown of Risky Transactions During Holiday Period:

 “Fraudulent activity tends to be particularly prevalent in online retail during the holiday shopping season,” said TransUnion Senior Vice President and Head of Global Fraud Solutions, Shai Cohen.

“Despite the fact that consumers have begun returning in larger numbers to in-person shopping in the post-pandemic era, online retail continues to be the preferred means of holiday shopping for many.

“It’s important that online retailers ensure consumer security and privacy protections, which is important to consumers, but in a way which ensures a seamless shopping experience that minimises unnecessary friction.”

In 2022, promotion abuse (user abuses site promotions such as refer-a-friend, free giveaways, etc) and account takeover (someone other than the owner of an account uses it without permission, indicating that the account has been maliciously compromised) were the top types of digital fraud in retail, according to the TransUnion analysis.

“Online retailers must equip themselves with the proper tools to detect fraud at the first warning sign, and without inhibiting the consumer journey,” said TransUnion Kenya CEO Morris Maina.

He added, “It’s more important than ever that these online retailers implement holistic fraud solutions that are able to verify customer identity and authenticity at the very beginning of a transaction without resulting in false positives that may cost them legitimate transactions.”

Consumers Concern

Consumers have expressed concern about being victimized amid the increase in suspected digital fraud casesduring the traditional busiest days of the holiday shopping season.

TransUnion’s 2022 Consumer Holiday Shopping Survey found that 63 per cent of Kenyan consumers were concerned about being victimised by online fraud this holiday season.

The firm monitors digital fraud attempts reported by businesses in various industries like gambling, gaming, financial services, healthcare, insurance, retail as well as travel and leisure.

The conclusions were based on intelligence from billions of transactions and more than 40,000 websites and apps contained in TransUnion’s flagship identity insights, digital insights, omnichannel authentication, and fraud analytics solution suite – TruValidate™.