Insights from TransUnion’s H2 2025 Update to the Top Fraud Trends Report revealed that 2.7% of all attempted digital transactions involving consumers in Hong Kong were suspected to be fraudulent in the first half of 2025, below the global average of 3.8%.

This marks an improvement from 3.8% in the same period last year, reflecting progress in Hong Kong’s fraud prevention efforts.

Despite this decline, fraud continues to pose significant financial and operational challenges.

A TransUnion business survey across six markets, including Hong Kong, Canada, India, the Philippines, the United Kingdom, and the US, found that 200 Hong Kong respondents reported losing an average of 7.1% of annual revenue to fraud over the past year, equivalent to around HK$92 billion.

Over half (51%) said they were extremely or very concerned about the impact of fraud, underscoring its continued threat to local businesses.

Three-quarters (75%) of Hong Kong businesses surveyed said they optimise their fraud detection models at least quarterly, with 21% doing so monthly.

The city also reported the highest proportion of companies with large fraud operations teams of more than 20 analysts.

However, only 56% of business leaders said they felt extremely or very prepared to identify multichannel fraud attacks, the lowest level of confidence among markets studied.

When asked about the leading causes of fraud losses, 26% cited third-party fraud involving stolen identities, followed by account takeover (22%) and scams or authorised fraud (18%).

These findings point to the continued prevalence of identity theft and unauthorised account access.

Fraud also remains a persistent issue for consumers.

TransUnion’s Consumer Pulse Study for Q2 2025 found that 37% of Hong Kong consumers were targeted by fraudulent emails, calls, or text messages between February and May, with 4% reporting financial loss.

Vishing, phone scams aimed at obtaining personal data, was the most common tactic, affecting 32% of respondents.

Among business leaders, phone-related risks were a major concern.

Nearly 80% expressed worry about compromised devices during the transmission of one-time passcodes, while 43% ranked phone number reputation, which includes fraud history and linked identity, among their top three fraud prevention priorities, the highest among all markets surveyed.

“It is encouraging to see Hong Kong making progress in combating and preventing fraud,”

said Devon Sin, Chief Product Officer at TransUnion Asia Pacific.

“However, as fraudsters continue to evolve and adapt, our data also showed that both businesses and consumers remain aware of increasingly sophisticated schemes such as identity-based fraud and phone-related scams. Businesses must tailor their strategies to local realities, balancing technology, processes and awareness to stay ahead of complex threats.”

Fraudsters have increasingly targeted sectors showing weaker defences.

While the financial services sector saw a 21% year-on-year decline in suspected digital fraud, the retail sector experienced a sharp rise.

In the first half of 2025, retail recorded the highest suspected digital fraud rate among Hong Kong industries at 19.4%, up 155% year-on-year, the highest rate and growth among all markets analysed.

This aligns with data from the Hong Kong Police Force, which reported that most online scams during the same period were linked to online shopping and job advertisements.

Telecommunications followed with an 8.9% suspected digital fraud rate, up 128% year-on-year, while logistics recorded 7.9%, up 117%.

Fraud attempts were most common during the early stages of the digital journey, particularly at account login, where the suspected fraud rate stood at 10.8%, more than double the global average of 4.3%.

In contrast, fraud rates during account creation (3.8%) and financial transactions (0.3%) remained below global averages, reflecting stronger onboarding and payment security controls.

“Fraudsters are highly adaptive. Even as awareness among businesses and consumers grows, cybercriminals continue to search for vulnerabilities across sectors and at every stage of the digital consumer lifecycle,”

added Sin.

“An enterprise-wide approach that leverages smarter fraud detection and breaks down fragmented systems is essential to strengthen defences and foster long-term resilience.”

TransUnion’s findings are based on data from its global fraud prevention solutions, with analysis covering 24 markets including Hong Kong, India, the Philippines, and the UK.

Featured image credit: Edited by Fintech News Hong Kong, based on image by Frolopiaton Palm via Freepik