TransUnion: US iGaming Platforms at Increased Risk of Digital Fraud

Article by : Erik Gibbs Mar 26, 2024

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A recent report by TransUnion revealed that fraudsters are ramping up their activity in the online gambling sphere and chose America as their prime target for digital scams during 2023.

According to TransUnion’s findings, the gambling sector, including sports betting sites, online casinos and poker platforms, experienced the highest rate of suspected digital fraud in the US last year, reaching 10.9%. This marks a notable increase from the 9% recorded in 2022, surpassing the traditionally dominant retail fraud.

The study pinpointed promotion abuse as the most prevalent form of fraud within the gambling industry. Furthermore, the report shed light on synthetic identity fraud, identifying it as the fastest-growing type of digital scam globally, with a staggering 14.2% year-over-year increase.

Synthetic identities, which involve fabricated or stolen identities utilized by fraudsters, have become a significant concern.

TransUnion’s data reveals that lender exposure to suspected synthetic identities across various sectors, including auto loans, bank credit cards, retail credit cards and unsecured personal loans, soared to $3.1 billion by the close of 2023. This represents a substantial 63% surge since 2020.

Steve Yin, TransUnion’s senior vice president and global head of fraud solutions, highlighted a noteworthy trend in the realm of digital fraud. He also emphasized how fraudsters are adapting their tactics, moving away from traditional methods of compromising existing accounts towards creating and controlling new accounts.

This shift toward new account digital fraud signifies a significant change in strategy, with fraudsters increasingly utilizing synthetic identities pieced together from data obtained through various breaches. The surge in suspected fraudulent accounts and synthetic identities can be attributed, in part, to the rise in data breaches.

The US witnessed a staggering 157% increase in data breaches from 2020 to 2023, with the average breach risk severity also climbing by 11% year-over-year to its highest recorded level.

Furthermore, TransUnion’s study revealed that nearly 14% of newly established digital accounts globally were flagged for potential digital fraud in 2023. This suggests a possible evolution in fraudsters’ tactics, indicating a tendency to engage earlier in the transactional process.

TransUnion’s comprehensive report drew upon insights from its global intelligence network and identity and fraud product suite, TransUnion TruValidate, offering valuable insights into the evolving landscape of digital fraud.