A 2024 report by TransUnion has highlighted a troubling trend, revealing that Kenya has the highest rate of digital fraud attempts in the retail sector among 19 countries surveyed.
The findings show that a significant portion of online and mobile transactions within Kenya’s retail market are flagged as potentially fraudulent.
The report, which is based on an online survey conducted between April 29 and May 20, 2024, with 15,372 adult respondents, ranked Kenya 11th globally for suspected digital fraud during the first half of 2024.
Among the 19 countries surveyed, Kenya’s retail sector was particularly vulnerable, with 11.7% of digital transactions in this sector being flagged as potential fraud the highest rate of suspected fraud in retail compared to other industries.
This alarming trend places Kenya’s retail sector at the forefront of digital fraud risks, particularly concerning as the government, under the Kenya Kwanza administration, has been pushing for an expanded digital economy.
Efforts to encourage more Kenyans to take up online jobs and engage in digital platforms may be undermined if the rate of online fraud continues to rise.
How the Fraud Happens:
Fraudsters commonly exploit the retail sector by creating fake accounts to access discounts or promotional offers, stealing credit card details to make purchases, and manipulating coupon codes or referral programs for personal benefit.
These fraudulent activities are most prevalent during sales events or special promotions.
Overall, the report found that 4.6% of all attempted digital transactions involving Kenyan consumers were suspected fraud attempts.
Out of these, 80% of consumers were targeted, and 8% actually fell victim to the fraud.
Beyond retail, the report also flagged online gaming and community platforms (such as dating apps and forums) as sectors with high rates of digital fraud.
Global Context:
Globally, the Philippines had the highest digital fraud rate at 18.0%, followed by Colombia at 17.4%, and the Dominican Republic at 16.1%.
The United Kingdom ranked fourth with 14.1%.
In Africa, Botswana came in 10th with a 12.5% fraud rate, with Kenya close behind in 11th place at 11.7%.
What This Means for Kenya:
The findings underscore the urgent need for Kenyan retailers to strengthen their fraud prevention strategies, particularly in the context of online transactions.
Experts recommend that retailers enhance their verification processes for promotional offers, closely monitor customer behavior, and implement more stringent fraud detection measures to protect consumers.
The report comes amid the ongoing Black November promotions in Kenya, a period when many retailers offer significant discounts, price reductions, and special deals, making it an even more critical time for retailers to be vigilant about fraud.
As Kenya’s digital footprint continues to expand, addressing the rising tide of digital fraud will be crucial for ensuring the security of online consumers and the long-term success of the country’s digital economy.
US Provides Armored Personnel Carriers To Kenyan Forces In Haiti
Email your news TIPS to Editor@NairobiNews.co.ke
