A recent survey conducted by TransUnion reveals that almost half (47%) of Canadians report they were targeted by online, email, phone call or text messaging fraud in the last three months*, of which 8% fell victim. A separate TransUnion study on 2023 Holiday E-commerce Fraud** indicates that the rate of potential fraud for e-commerce transactions where consumers are located in Canada over the “Cyber Five” holiday shopping period increased by 4.5% compared to the same period in 2022, yet was 66.5% lower than during the rest of 2023 (Jan. 1 – Nov. 22, 2023). The five-day holiday shopping period (referred to as the “Cyber Five”), spans the Thursday before Black Friday to Cyber Monday.
While many Canadians are still managing economic pressures and are tightening their spend, TransUnion data indicates that e-commerce transactions (purchases, logins and account openings) originating from Canada were strong over the 2023 Cyber Five period with a 17.2% increase in the volume of transactions, compared to the five-year average from 2018-2022 over the same period. This is despite 80% of Canadians who expressed concern about falling victim to online fraud during the holiday season in general.***
“The good news is that Canadian e-commerce activity appeared to be strong over the early holiday period, despite the economic headwinds faced by consumers,” said Patrick Boudreau, head of identity management and fraud systems at TransUnion Canada. “However, since the holiday shopping season attracts an increase in consumers looking for online deals and to buy gifts for loved ones, it also attracts fraudsters looking to take advantage for financial gain. If fraud guards are lowered to help minimise consumer friction and maximise sales, fraudsters can take advantage, which can potentially lead to an uptick in chargebacks, returns and customer disputes down the road.”
Suspected fraud rates decline 66.5% during Cyber Five: According to TransUnion’s 2023 holiday fraud analysis, the rate of suspected fraudulent e-commerce transactions originating from Canada dropped to 1.21% during the Cyber Five shopping period, indicating that around 1 in every 100 transactions were potentially fraudulent over the five-day period. This compares to a higher rate of suspected e-commerce fraud for the rest of 2023 leading up to the Cyber Five period of 3.16%, meaning more than 3 in every 10- transactions were suspected as being fraudulent.
Fraudsters pursuing ever more sophisticated and diverse scams targeting consumers: In Q4 2023, almost half (47%) of Canadians reported being targeted by some online, e-mail, phone call or text message fraud in the last three months. Gen Zs (59%) and Millennials (53%) said they were targeted more frequently than other generations, likely because they’re engaging in more digital transactions and are likely more exposed to increased cyber threats.
Top three fraudulent schemes identified by those who said they were targeted by fraud:
- Phishing (44%): Fraudulent emails, websites, social posts, QR codes, etc. meant to steal data.
- Smishing (36%): Fraudulent text messages meant to trick you into revealing data.
- Vishing (35%): Fraudulent phone calls meant to trick you into revealing data.
Other fraud schemes included:
- Money/gift card scam: 21%
- Third-party seller scams on legitimate online retail websites: 18%
- Identity theft: 14%
- Stolen credit card or fraudulent charges: 12%
- Account taken over (online account used without permission, including unauthorized stolen funds from bank accounts): 11%
- Unemployment fraud: 9%
- Money mule scam (solicited transfer or move illegally acquired money on behalf of someone else): 8%
Canadians unsure of necessary actions to take when targeted by fraud scams: Of all surveyed Canadians who said they haven’t taken any actions in the last 60 days in response to cyber security concerns, nearly half (48%) said they haven’t done so because they were unsure what actions to take.
Privacy concerns top of mind: Privacy remains a top concern for Canadians, with 70% indicating concern with sharing personal information. Reasons for concerns with sharing personal information included identity theft (79%), invasion of privacy (67%), unsolicited marketing communications (44%) and government surveillance (22%).
Canadians monitor their credit reports to protect against fraud:
Overall, 88% of Canadians believe monitoring their credit report is important. Around four in ten (41%) of Canadians check their credit scores at least monthly (Gen Z at 65%). Among those who said they monitor their credit report, 36% said they do so to protect against fraud.
“The insidious aspect of these threats is fraudsters are playing the long game, often seeking to extract information on consumers they can use to build identities to gain access to credit,” said Boudreau. “Given the prevalence of fraudulent scams targeting Canadians, and the reality that fraudsters are ever more sophisticated and constantly evolving to attempt to overcome digital security measures, it’s critical Canadians take steps to protect themselves.”
Read More: SalesTechStar Interview with Bob Moore, Co-Founder and CEO at Crossbeam