Hong Kong, renowned for its financial muscle and technological prowess, has an increasingly grim downside: it is becoming a magnet for digital fraudsters, reveals a recent report from TransUnion, an American consumer credit reporting agency.

Most of the scams can be attributed to online payments

The report found that Hong Kong topped the list of regions with high levels of suspected digital fraud, with 18% of digital transactions flagged for potential fraudulent activity in the first half of 2023. This rise in digital scams comes amid a significant uptick in online payments, influenced by the pandemic and subsequent social distancing measures.

Digital Fraud

What sets Hong Kong apart, however, is the sectors most affected. Interestingly, the travel and leisure sector led the way with a suspected fraud rate of 8%. Jerry Ying, chief product officer at TransUnion Asia-Pacific, argues that as the city opens up post-pandemic and digital transactions in the travel sector surge, fraudsters see new opportunities for exploitation.

Besides travel, online communities like dating websites and forums are also becoming risky spaces. Around 5% of transactions in these areas were flagged for fraud, mostly related to fake profiles. This comes at a time when Hong Kong citizens are relying more on digital platforms for social interaction and personal needs.

Last year, citizens lost HK$4.8 billion (US$611.5 million) to frauds, including schemes involving fake police calls and quick money scams. With more professionals (6% of survey respondents) falling victim to fraud between April and July, the message is clear: businesses and consumers alike need to up their game when it comes to digital security.

According to Ying, it’s not just up to consumers to stay vigilant; businesses should allocate resources to improve their data analytics and technological capabilities to better spot fraudulent activity. As Hong Kong continues to balance its technological advancement with fraud risks, both sectors and individuals must be more cautious than ever.

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