Kenya has recorded a 9.5% increase in digital shopping fraud attempts at the beginning of the holiday shopping season that occurred between 23rd and 27th November 2023, according to data released by TransUnion.
- TransUnion also determined that 10.3% of Kenyan transactions – over the Black Friday period (23 – 27 November 2023), were potentially fraudulent.
- The data also shows that Kenya’s cases were 2.8% lower than the rest of 2023 (1 January to 22 November).
- About 10.3% of e-commerce transactions from Kenya during that period were suspected to be fraudulent compared to 9.3% the rest of the year.
“Just as the holiday season drives consumers online to begin shopping for gifts for their loved ones, so does it become a destination for fraudsters seeking to take advantage of this time for their financial gain,” said Steve Yin, global head of fraud at TransUnion.
As part of this analysis, the top indicators of fraudulent e-commerce transactions during the holiday shopping season globally.
This year, transactions per IP triggered with an unusual volume of activity from a single Internet Protocol (IP) address to a customer’s site in a short time, and transactions per device (triggered with an unusual volume of activity from a single device to a customer’s site in a short time) were the leading indicators for potential fraud attempts.
“We hear that payment card issuers tend to use a different model during holiday shopping periods to allow more authorizations to complete quickly,” said Morris Maina, CEO at TransUnion Kenya. “It seems that a similar tactic is being used by retailers concerned that any friction may drive consumers away, reflecting the elevated competition and aggressiveness of retailers to ensure greater shopping volume,” said Maina.
- Criminal organizations look forward to this period of lax fraud controls. For retailers that allow guest checkouts, fraudsters will transact using stolen payment cards they’ve purchased from the dark web or have previously harvested from other data breach attacks.
- While online sales numbers for retailers are now known, retailers will have to wait and hope that fraud losses do not pile up. The challenge is that they won’t know for some time; merchants will have to wait for an uptick in chargebacks, returns, and customer disputes before that becomes clear.
- The rate or percentage of suspected digital fraud attempts reflect interactions that TransUnion customers either denied in real time due to fraudulent indicators or determined to be fraudulent after a manual review process—compared to all transactions it assessed for fraud.
“The upcoming holidays mark the biggest shopping season of the year for retailers, but equipping themselves with the proper tools to detect fraud at the first warning sign is a year-round priority,” said Maina. “A critical way to minimize fraudulent transactions while at the same time protecting legitimate ones involves implementing holistic fraud solutions that can verify customer identity and authenticity at the very beginning of a transaction, including both account creation and login.”