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Nairobi Business Monthly
Home»Companies»Consumers concerned as online fraud cases in Kenya hit 42%
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Consumers concerned as online fraud cases in Kenya hit 42%

NBM CORRESPONDENTBy NBM CORRESPONDENT21st December 2022Updated:21st December 2022No Comments3 Mins Read
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Ever shopped online, paid via bank or mobile money transfer, and felt uneasy? It is festive season, and statistics show a worrying trend.

TransUnion, an information and insights firm, says fraud attempts in the retail sector have hit 42% in Kenya. It also found that 5.4% of the country’s online transactions reviewed from November 24 to 28, were “suspected” to be fraudulent.

The company’s senior vice president and head of global fraud solutions Shai Cohen, says fraudulent activity tends to be particularly prevalent in online retail during the holiday shopping season.

The Nairobi Law Monthly September Edition

“It’s important that online retailers ensure consumer security and privacy protections, which is important to consumers, but in a way which ensures a seamless shopping experience that minimises unnecessary friction,” says Cohen.

Mr Cohen notes that despite the fact that consumers have begun returning in larger numbers to in-person shopping in the post-pandemic era, online retail continues to be the preferred means of shopping for many.

One of the reasons why online fraud is on the rise particularly during the festive season is because people have lowered their guard with 63% of Kenyan consumers said to be ignoring warning signs. Globally, the average number of suspected digital fraud attempts on any given day hit 82% in November, according to the report.

Online shopping

“Online retailers must equip themselves with the proper tools to detect fraud at the first warning sign, and without inhibiting the consumer journey,” says Morris Maina, chief executive officer, TransUnion Kenya.

Mr Maina says that it is smart for online retailers to find ways to ensure consumer security while also delivering a seamless shopping experience. He adds that the top types of online fraud taking place at the moment are more of ‘promotion abuse’ whereby a user takes advantage of site promotions such as “refer-a-friend”, or “free giveaways”, and “account takeover” – someone other than the owner of an account rides on such ‘promotions’ without permission, an indication that the account has been maliciously compromised.

“It’s more important than ever that these online retailers implement holistic fraud solutions that are able to verify customer identity and authenticity at the very beginning of a transaction without resulting in false positives that may cost them legitimate transactions,” says Maina.

                  Breakdown of risky transactions during holiday period

DayTransactions in KenyaGlobally
Thursday, November 2425%14%
Friday, November 2520%25%
Saturday, November 2616%21%
Sunday, November 2715%18%
Monday, November 2823%22%
Source: TransUnion

The Nairobi Law Monthly September Edition
2022 chief executive officer customer identity e-commerce festive season fraud fraudulent global fraud information and insights Kenya Kenyan consumers Morris Maina online retail post-pandemic era privacy protection security Shai Cohen shopping experience transactions TransUnion TransUnion Kenya verify customer Vp warning signs
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