Fraudsters exploit trust to manipulate credit reports

A new global fraud study from TransUnion, a leading credit-reporting agency, reveals that fraudsters are increasingly exploiting trusted identity-verification systems to commit fraud, rather than creating false identities. This shift has led to a significant increase in fraudulent manipulation of credit reports.

TransUnion’s analysis reveals that 81% of global digital fraud cases in the first half of 2026 took place during interactions with current customers, as fraudsters take advantage of established trust and existing accounts. The data shows account logins made up 53% of all suspected digital fraud, financial transactions 27.9%, and account setups 13.1%.

The research project, called “Fraud in the Age of Continuous Trust,” gathered insights from 1,600 fraud and risk-control leaders at mid-sized and large consumer-facing firms across eight nations, including the U.S. It also incorporated a consumer survey conducted with a third-party firm involving 13,500 adults from 19 countries.

In the U.S., fraud-control managers are grappling with an expanding risk challenge, where scam and authorized fraudulent transactions represent 35% of business fraud losses. This figure is almost twice that of first-party fraud and synthetic-identity fraud, each at 18%. TransUnion highlights that artificial intelligence is providing fraudsters with significant assistance in undermining trust-based fraud defenses.

Credit washing and its counterpart, chargeoff suppression, represent rapidly expanding fraud types targeting banks and lenders. Credit washing involves fraudsters leveraging legitimate dispute and consumer-protection mechanisms to boost their credit scores. Chargeoff suppression refers to removing negative chargeoff entries from credit reports to improve scores.

TransUnion found a 595% increase in consumer-initiated chargeoff suppressions over a recent 18-month period. The company estimates that $3.7 billion in U.S. chargeoff losses will be erased from credit reports this year due to such suppressions, up from $2.7 billion last year and $1.2 billion in 2024.

Organizations are facing mounting financial repercussions, with business leaders estimating fraud losses equivalent to nearly 7% of annual revenue in the past year. Advances in AI and automation are helping criminals open fraudulent accounts, infiltrate existing ones and undermine customer relationships at greater scale. TransUnion’s study shows the necessity for companies to evolve their fraud-mitigation approaches to counter these emerging threats.