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COVID-19 has caused monumental shifts in our daily routines; perhaps most notable, is that the vast majority of us across the country have been asked to stay home. While the orders will hopefully help us flatten the curve, it’s had a ripple effect on the automotive industry. More people at home means fewer cars on the road; and the fewer miles that are driven means more time may pass between regularly scheduled maintenance. But that doesn’t mean activity on the road is nonexistent. While it’s true, millions of Americans are not driving to work, going to school or embarking on day trips, essential personnel and organizations are working tirelessly to deliver food and other resources, not to mention, protecting the health and safety of those around us. These vehicles still require proper maintenance and care to ensure they run smoothly. That’s where the automotive industry can help. Based on the year, make, model, engine, mileage and dozens of other attributes, vehicles require different services and parts, such as oil, tires, belts, etc. The more automotive aftermarket organizations and repair centers understand about these essential commercial vehicles, the better positioned they will be to prioritize inventory and redirect technicians. To help them better understand the market, we examined vehicles on the road by select vocations that are deemed essential, including ambulatory healthcare services, food services and drinking places, and social assistance organizations. Healthcare Transportation to hospitals and healthcare offices for those in need is critical during this difficult time. But since the use cases for these services can vary, the types of vehicles used can also fluctuate. Through the end of 2019, nearly 73 percent of vehicles used for ambulatory healthcare services were light-duty trucks, while nearly 24 percent were passenger cars and the remaining 3.3 percent were medium- and heavy-duty vehicles. Add to that, more than 33 percent of these vehicles fell within the traditional aftermarket “sweet spot”—vehicles between six and 12 years old—which means some of these vehicles will require maintenance in the near future. If we also factor in that some of these vehicles accumulate more mileage than the average vehicle for personal use, the number of vehicles that require maintenance and replacement parts may be much higher. Food service Beyond the essential workers within the medical field, those within the food industry have expanded delivery services to provide food to Americans, while also limiting physical contact. Through the same time period, light-duty trucks made up 85 percent of these vehicles, while passenger cars made up 13.9 percent—more than half of these vehicles were made by Ford (34.9 percent) and Chevrolet (20.9 percent). It’s important to note that these vehicles do not include the thousands of personal vehicles used by drivers for prominent third-party deliver services. Across the industry, these vehicles will likely accrue more mileage than under normal circumstances. Non-profit organizations The pandemic has upended lives across the country, and many social assistance organizations have risen to the occasion to help those most in need. Similar to other essential workers, these vehicles are likely accumulating more mileage than normal, and it will be important to find ways to keep these vehicles running smoothly. Much like food service and drinking places, the types of vehicles follows a similar breakdown: 81.6 percent are light-duty trucks and 14.6 percent are passenger cars. Ford is also the most prominent brand for these vehicles, making up more than 41 percent of these vehicles. The models that make up the most significant percentage of these vehicles, include Ford E-350 (11%), Dodge Grand Caravan (10.1%) and Chevrolet Express 3500 (8.3%). With many car and trucks likely sitting in garages and driveways, the demand for automotive parts and repairs may be down, however there are hundreds of thousands of vehicles that will still require maintenance. These vehicles may differ slightly from those typically on the road, so it’s important for aftermarket companies to identify the types of vehicles and where they are most prominent. With essential organizations helping us manage through this difficult time, the automotive industry can help them continue to stay on the road.

This is the next article in our series about how to handle the economic downturn – this time focusing on how to prevent fraud in the new economic environment. We tapped two new experts—Chris Ryan, Market Lead, Fraud and Identity and Tischa Agnessi, Go-to-Market Lead, Decisioning Software—to share their thoughts on how to keep fraud out of your portfolio while continuing to lend. Q: What new fraud trends do you expect during the economic downturn? CR: Perhaps unsurprisingly, we tend to see high volumes of fraud during economic downturn periods. First, we anticipate an uptick in third-party fraud, specifically account takeover or ATO. It’ll be driven by the need for first-time users to be forced online. In particular, the less tech-savvy crowd is vulnerable to phishing attacks, social engineering schemes, using out-of-date software, or landing on a spoofed page. Resources to investigate these types of fraud are already strained as more and more requests come through the top of the funnel to approve new accounts. In fact, according to Javelin Strategy & Research’s 2020 Identity Fraud Study, account takeover fraud and scams will increase at a time when consumers are feeling financial stress from the global health and economic crisis. It is too early to predict how much higher the fraud rates will go; however, criminals become more active during times of economic hardships. We also expect that first party fraud (including synthetic identity fraud) will trend upwards as a result of the deliberate abuse of credit extensions and additional financing options offered by financial services companies. Forced to rely on credit for everyday expenses, some legitimate borrowers may take out loans without any intention of repaying them – which will impact businesses’ bottom lines. Additionally, some individuals may opportunistically look to escape personal credit issues that arise during an economic downturn. The line between behaviors of stressed consumers and fraudsters will blur, making it more difficult to tell who is a criminal and who is an otherwise good consumer that is dealing with financial pressure. Businesses should anticipate an increase in synthetic identity fraud from opportunistic fraudsters looking to take advantage initial financing offers and the cushions offered to consumers as part of the stimulus package. These criminals will use the economic upset as a way to disguise the fact that they’re building up funds before busting out. Q: With payment stress on the rise for consumers, how can lenders manage credit risk and prevent fraud? TA: Businesses wrestle daily with problems created by the coronavirus pandemic and are proactively reaching out to consumers and other businesses with fresh ideas on initial credit relief, and federal credit aid. These efforts are just a start – now is the time to put your recession readiness plan and digital transformation strategies into place and find solutions that will help your organization and your customers beyond immediate needs. The faceless consumer is no longer a fraction of the volume of how organizations interact with their customers, it is now part of the new normal. Businesses need to seek out top-of-line fraud and identity solutions help protect themselves as they are forced to manage higher digital traffic volumes and address the tough questions around: How to identify and authenticate faceless consumers and their devices How to best prevent an overwhelming number of fraud tactics, including first party fraud, account takeover, synthetic identity, bust out, and more. As time passes and the economic crisis evolves, we will all adapt to yet another new normal. Organizations should be data-driven in their approach to this rapidly changing credit crisis and leverage modern technology to identify financially stressed consumers with early-warning indicators, predict future customer behavior, and respond quickly to change as they deliver the best treatment at the right time based on customer-specific activities. Whether it’s preparing portfolio risk assessment, reviewing debt management, collections, and recovery processes, or ramping up your fraud and identity verification services, Experian can help your organization prepare for another new normal. Experian is continuing to monitor the updates around the coronavirus outbreak and its widespread impact on both consumers and businesses. We will continue to share industry-leading insights to help financial institutions differentiate legitimate consumers from fraudsters and protect their business and customers. Learn more About Our Experts [avatar user="ChrisRyan" /] Chris Ryan, Market Lead, Fraud and Identity Chris has over 20 years of experience in fraud prevention and uses this knowledge to identify the most critical fraud issues facing individuals and businesses in North America, and he guides Experian’s application of technology to mitigate fraud risk. [avatar user="tischa.agnessi" /] Tischa Agnessi, Go-to-Market Lead, Decisioning Software Tischa joined Experian in June of 2018 and is responsible for the go to market strategy for North America’s decisioning software solutions. Her responsibilities include delivering compelling propositions that are unique and aligned to markets, market problems, and buyer and user personas. She is also responsible for use cases that span the PowerCurve® software suite as well as application platforms, such as Decisioning as a ServiceSM and Experian®One.

The coronavirus (COVID-19) outbreak is causing widespread concern and economic hardship for consumers and businesses across the globe – including financial institutions, who have had to refine their lending and downturn response strategies while keeping up with compliance regulations and market changes. As part of our recently launched Q&A perspective series, Shannon Lois, Experian’s Head of DA Analytics and Consulting and Bryan Collins, Senior Product Manager, tackled some of the tough questions for lenders. Here’s what they had to say: Q: What trends and triggers should lenders be prepared to react to? BC: Lenders are still trying to figure out how to assess risk between the broader, longer-term impacts of the pandemic and the near-term Coronavirus Aid, Relief, and Economic Security (CARES) Act that extends relief funds and deferment to consumers and small businesses. Traditional lending processes are not possible, lenders will have to adjust underwriting strategies and workflows as they deploy hardship programs while complying with the Act. From a utilization perspective, lenders need to look for near-term trends on payments, balances and skipped payments. From an extension standpoint, they should review limits extended or reduced by other lenders. Critical trends to look for would be missed or late auto payments, non-traditional credit shopping and rental payment delinquencies. Q: What should lenders be doing to plan for an uptick in delinquencies? SL: First, lenders should make sure they have a complete picture of how credit risk and losses are evolving, as well as any changes to their consumers’ affordability status. This will allow a pointed refinement of their customer management strategies (I.e. payment holidays, changing customer to cheaper product, offering additional services, re-pricing, term amendment and forbearance management.) Second, given the increased stress on collection processes and regulations guidelines, they should ensure proper and prepared staffing to handle increased call volumes and that agency outsourcing and automation is enabled. Additionally, lenders should migrate to self-service and interactive communication channels whenever possible while adopting new segmentation schemas/scores/attributes based on fresh data triggers to queue lower risk accounts entering collections. Q: How can lenders best help their customers? SL: Lenders should understand customers’ profiles with vulnerability and affordability metrics allowing changes in both treatment and payment. Payment Holidays are common in credit card management, consider offering payment freezes on different types of credit like mortgage and secured loans, as well as short term workout programs with lower interest rates and fee suppression. Additionally, lenders should offer self-service and FAQ portals with information about programs that can help customers in times of need. BC: Lenders can help by complying with aspects of the CARES Act guidance; they must understand how to deploy payment relief and hardship programs effectively and efficiently. Data integrity and accuracy of loan reporting will be critical. Financial institutions should adjust their collection and risk strategies and processes. Additionally, lenders must determine a way to address the unbanked population with relief checks. We understand how challenging it is to navigate the changing economic tides and will continue to offer support to both businesses and consumers alike. Our advanced data and analytics can help you refine your lending processes and better understand regulatory changes. Learn more About Our Experts: Shannon Lois, Head of DA Analytics and Consulting, Experian Data Analytics, North America Shannon and her team of analysts, scientists, credit, fraud and marketing risk management experts provide results-driven consulting services and state-of-the-art advanced analytics, science and data products to clients in a wide range of businesses, including banking, auto, credit, utility, marketing and finance. Shannon has been a presenter at many credit scoring and risk management conferences and is currently leading the Experian Decision Analytics advisory board. Bryan Collins, Senior Product Manager, Experian Consumer Information Services, North America Bryan is a member of Experian's CIS product management team, focusing on the Acquisitions suite and our evolving Ascend Identity Services Platform. With more than 20 years of experience in the financial services and credit industries, Bryan has established strong partnerships and a thorough understanding of client needs. He was instrumental in the launch of CIS's segmentation suite and led product management for lender and credit-related initiatives in Auto. Prior to joining Experian, Bryan held marketing and consumer experience roles in consumer finance, business lending and card services.