Between social unrest across the globe, the lingering pandemic, and the digital transformation brought on by the health crisis, the fraud landscape has expanded dramatically for businesses and consumers alike. According to Experian’s latest global identity and fraud report, 93% of U.S. companies have mid-to-high concern for fraud, and 81% say that their worries about fraud have increased over the past 12 months. Monitoring unused or dormant accounts for fraud is often a warning directed at consumers. However, it’s now advice an increasing number of businesses are wishing they’d followed, as growing synthetic identity (SID) fraud is fueling a dramatic increase in losses—SID related charge-offs ballooned to $20 billion in 2021 alone, according to the Federal Reserve Bank of Boston. The threat of SIDs SIDs are made to look like an actual consumer, combining both real and fake data to form a new composite identity. They typically evolve using a combination of tactics that include: Identifying and creating relationships with businesses that have a high tolerance for identity discrepancies. These include businesses whose products expose the business to low fraud risk and/or products offered to market segments where identity verification is expected to be challenging. Either of these enable an SID to be planted among consumer data sources. Attaching the SID to existing accounts and relationships that belong to other consumers. Often these existing accounts were established by collusive criminals or by using other SIDs, but there are also ways for legitimate consumers to collect ‘rent’ in exchange for adding other consumers to existing accounts. Either approach improves the SID’s appearance of credit worthiness. Progressively building the SID’s independent ability to access larger and larger amounts of credit until they spend quickly and default on all obligations, leaving no one for the victimized businesses to pursue. “They’re difficult to identify because of the combination of real and fake data and because there’s no actual victim reporting an identity theft. As a result, businesses typically have trouble separating SID losses from credit losses,” said Chris Ryan, Experian’s go-to-market lead for fraud and identity. “SID fraud isn’t committed haphazardly.  It’s carefully planned and executed—and it adapts to policy changes. Some businesses change their underwriting policy or focus on early-lifecycle account activity like purchases, payments, and requests for additional credit to reduce SID losses that occur immediately after an account is opened. SIDs can adapt to this. If six months of responsible account behavior earns a credit line increase or the ability to spend large amounts in a single billing cycle, the perpetrators are willing to wait,” Ryan said. “It’s something businesses and lenders need to be on guard for, especially with the fast-paced holiday shopping season ahead,” he said. Addressing SIDs Solving the increasingly complex problem of SID fraud requires a thoughtful approach. The institutions seeing success at preventing multi-faceted fraud are using a layered approach to identifying and mitigating fraud. Here are three steps lenders can take today to prevent SID fraud across your portfolio: Use data and analytics that extend beyond credit to evaluate identities and their histories more completely. Apply those analytics across the lifecycle from marketing and origination to portfolio management recognizing that SID risk is not restricted to a single lifecycle stage. Have a rigorous verification process that escalates to document verification or the Social Security Administrations Electronic Consent Based SSN Verification (eCBSV) process For more information on how you can leverage a multi-layered approach to fraud in your business, visit our fraud and identity solutions hub or request a call to discuss customizing a solution for your company.

Leasing has long been a popular choice among consumers who want to enjoy the latest vehicle models, but at a lower monthly payment. In fact, the average monthly lease payment was $127 less than a loan payment in Q2 2022. However, in recent quarters, we’ve seen leasing availability decline due to current market conditions. According to Experian’s State of the Automotive Finance Market Report: Q2 2022, leasing declined from 27.82% to 19.65% year-over-year, marking the lowest drop in quite some time. When analyzing previous data, leasing comprised 30.41% of all new vehicles in Q2 2018, decreasing to 30.04% in Q2 2019 and 26.58% in Q2 2020. There are likely a number of factors contributing to the decline of leasing over recent years, including the ongoing inventory shortages and OEMs not offering as many incentives, which may result in leasing opportunities becoming less common. Other scenarios can be consumers choosing to extend their lease, or purchase the vehicle once their lease has expired. In Q2 2022, the average monthly lease payment increased to $540, from $475 in Q2 2021. Though, the average monthly loan payment for a new vehicle surpassed $600 this quarter—coming in at $667, an $85 year-over-year increase. As automotive professionals continue to navigate through the inventory shortages and subsequent vehicle price increases, understanding the landscape and what options are available for consumers will be critical. One way to keep on top of the trends is analyzing the pricing options for the most popular leased models, which will enable more informed decisions in the months to come. Average monthly payment for top leased models As previously mentioned, there was an average payment difference of $127 between a lease and a loan in Q2 2022. However, that’s just an average, and these numbers can vary based on the vehicle type. For example, the average monthly lease payment for a Honda Civic was $363 in Q2 2022, as opposed to the average monthly loan payment of $476. In comparison, the average monthly lease payment for a Ford F-150 came in at $516 this quarter, compared to the average monthly loan payment of $832. While a pickup truck may typically have a higher average monthly lease payment than a sedan, consumers are continuing to choose larger vehicles, overall. In Q2 2022, there was only one sedan that made up the top leased vehicles—with the Ford F-150 having the highest leasing registration volume, comprising 2.3% this quarter. Rounding out the top five were Chevrolet Equinox (2.27%), Honda CR-V (2.16%), Honda Civic (2.09%), and Ram 1500 (1.81%). Despite the overall decline in leasing over the past year, it continues to be a financing option that consumers can consider amid vehicle prices increasing. Knowing what vehicles are most prevalent as well as their price points will allow professionals to create strategies that cater to the most current consumer financing preferences during their search for a vehicle that fits their needs. To learn more about leasing and other automotive finance trends, watch the entire State of the Automotive Finance Market: Q2 2022 presentation on demand.

Earlier this year, I explored the potential impact of the end of the current Public Health Emergency (PHE). The U.S. federal government has been operating under a PHE for COVID-19 for more than 30 consecutive months since it was initially announced in January 2020. On July 15, 2022, this PHE was renewed for a tenth time. Following this latest extension, the Centers for Medicare & Medicaid Services (CMS) has released a roadmap for the end of the COVID-19 PHE. In a related blog, they reiterate the commitment to provide a 60-day notice prior to the end of the PHE, but urge states and healthcare providers to prepare for the end “as soon as possible.” With these upcoming changes in mind, I wanted to review key areas for providers to consider as they prepare for the end of the PHE. Enrollments continue to increase, putting state budgets at risk From the start of the PHE in February 2020 through April 2022, Medicaid/Children’s Health Insurance Plan (CHIP) enrollment has increased by more than 17M people and this is affecting every state. Nearly half of all states have experienced an increase of more than 25% during this time period, with some experiencing increases of more than 40%. Given an average Medicaid cost to states of more than $8.4K per capita, that translates to an increase of billions of dollars. Once the PHE expires, states will have 12 months to redetermine eligibility for continued enrollment in the program, or risk bearing 100% of the associated cost. Preparing for the end of the PHE To avoid unnecessary expenditures and ensure that citizens are receiving access to the correct services, states will have to conduct a holistic review of their Medicaid rolls to confirm eligibility. In CMS’s guidance for states to prepare for the end of the PHE, they recommend creating an automated process to handle this unprecedented review. With the right partner, agencies can perform redeterminations of their existing registration rolls, and prepare for future services requests. The right solution can allow citizens to easily apply for benefits, triggering the automatic, real-time pull of income and employment information so that the agency can verify eligibility. Experian is a trusted government partner that is ready to assist states with preparing and automating the process for redetermination of benefits. To learn more about how Experian can assist with citizen benefit redetermination and registration efforts, visit us or request a call. Learn more