New African fraud statistics: Cryptocurrency Fraud Spikes, Deepfake Fraud Emerges, and Forced Verification Alarms

Verification global leader Sumsub shares regional fraud statistics for H1 2023

Sumsub announces its strengthened presence in Africa while shedding light on alarming fraud trends that have emerged during the first half of 2023, based on a comprehensive analysis across South Africa, Tanzania, Kenya, and Nigeria.

Africa’s rapidly evolving digital landscape has opened new doors for innovation, but it has also become a hotbed for evolving fraud tactics. The data presented below underscores the importance of robust fraud protection measures for businesses operating in the region:

Cryptocurrency Fraud Surges

Fraud cases within South Africa’s cryptocurrency sector surged by 25% during the last quarter, demonstrating the growing sophistication of fraudsters in exploiting the booming crypto market.

Rise of Deepfake Fraud

A novel threat emerged in 2023 as deepfake fraud surfaced, accounting for 0.6% of all fraud cases in Kenya and 2.2% in South Africa. This technique involves the creation of lifelike personas using authentic individuals’ documents, posing a unique challenge for verification providers.

Forced Verification Raises Concerns

South Africa and Kenya experienced an alarming surge in forced verification cases, constituting 6% and 7% of all fraud instances in 2023, respectively. Forced verification occurs when individuals are subjected to verification procedures against their will, potentially indicating illicit activities.

Hannes Bezuidenhout, recently appointed as VP of Sales for the African region, reaffirms Sumsub’s commitment to addressing these evolving challenges: 

African markets hold a prominent position in our global expansion strategy. The rapid digital transformation across the continent creates significant opportunities for seamless user onboarding and robust fraud prevention. Sumsub has been a trusted partner for global firms, enabling efficient verification processes while ensuring compliance and thwarting fraud. We are fully prepared to extend our services to a broader customer and partner base in Africa.

The internal report also unveils specific regional insights:

Country-Specific Trends

-Tanzania witnessed a remarkable 250% increase in crypto fraud and a significant 150% growth in fintech-related fraud.

– Kenya experienced more than a doubling of crypto fraud cases, highlighting the rising challenges faced by the industry.

– Nigeria reported a 59% rise in IT services fraud and a 46% increase in fintech-related fraud.

Document Fraud in Focus

– Edited ID Cards accounted for 41% of all fraud cases in Tanzania, involving manipulated legitimate documents.

– Nigeria reported a concerning 61% of fraud instances attributed to forged ID Cards, highlighting the prevalence of counterfeit documents.

– South Africa grappled with 18% of fraud cases due to visual deception during Liveness checks, with fraudsters presenting images of phone screens or owner photographs from identity documents to cameras.

Sumsub’s analysis also reveals that the most widely used documents for verification purposes were ID cards (62% of checks), driver’s licenses (22%), passports (10%), and residence permits (5%).

As African markets continue to evolve, Sumsub stands ready to empower businesses with the tools they need to combat digital fraud and ensure robust protection throughout the customer journey. The internal statistics underscore the imperative for businesses to integrate advanced fraud prevention mechanisms to safeguard both their operations and their clients.

  • August 22, 2023
  • Corporate

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