TransUnion has reported a significant rise in digital fraud in financial services from Hong Kong, where Gen Z and Millennials are the most targeted generations. Research from TransUnion's H2 2024 Update indicates that 5.7% of digital transactions attempted by consumers in Hong Kong were suspected of fraud in the first half of 2024, surpassing the global average of 5.2% by 10%.

The report highlights persistent challenges in addressing fraud across various industries. Online forums and dating sites are targets for digital fraud In H1 2024, the community industry, including online forums and dating sites, had the highest suspected digital fraud rate globally at 11.5%. It recorded the highest rates in seven of 19 surveyed countries, with Hong Kong reaching 15%.

TransUnion reported that profile misrepresentation was the most common type of Digital Fraud encountered by their customers during this period. Account creation represents the highest risk in Hong Kong's digital communities, with 29% of such transactions flagged as suspected digital fraud in H1 2024, a 126% increase from H1 2023. This rise may be due to the use of synthetic or stolen identities.

These findings correspond with Hong Kong police reports of over 500 fraudulent activities related to fake compensated dating scams, resulting in losses of USD 31.259.447 million in H1 2024. The retail sector in Hong Kong recorded a 9.5% suspected digital fraud attempt rate in H1 2024, second only to financial services at 5.5%. Financial services experienced a 29% year-over-year increase in fraud attempts.

In response, the Hong Kong Monetary Authority (HKMA) proposes legislative amendments to enable banks to share information to combat fraud. This is fundamental due to a significant rise in financial losses, with suspected fraud attempts in financial services increasing by 78% from H1 2023 to H1 2024. Over half of Gen Z consumers in Hong Kong experienced fraud schemes Suspected consumer fraud is a significant issue, as shown in TransUnion’s Q3 2024 Hong Kong Consumer Pulse Study, where 39% of 860 respondents reported being targeted by various fraud attempts in the past three months, with 5% falling victim.

Gen Z (51%) and Millennials (41%) experienced the highest targeting rates, with Gen Z's vulnerability linked to their heavy digital engagement. Among all generations, vishing (36%) and phishing (33%) were the most common fraud schemes reported. .