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TransUnion Live – Top Trends of the 2023 Holiday Season

12/10/2023
Video

With the holiday season here, gaining insight about consumer purchasing and fraud threats this time of year can help protect your business and give it a competitive edge in the market.

Watch our on-demand TransUnion Live where we explored trends for holiday shopping and travel, as well as ecommerce fraud, based on proprietary TransUnion research:

Full Transcript Below

Andrew Goss/Host:

Well welcome everyone to a special holiday episode of TransUnion Live on LinkedIn. I'm TransUnion's Andrew Goss and I'm excited to be joined by my esteemed colleagues, Cecilia Seiden. And Charlie Wise, welcome.

Cecilia Seiden/VP Retail, TransUnion:

Thank you. Thank you.

Andrew Goss/Host:

Well, we're here today to explore what TransUnion recently uncovered around holiday purchases, travel and fraud. But before we get started, I have a quick disclaimer. I always start off with, at the beginning of these conversations, we welcome your questions related to today's conversation in the comments area. If they're applicable and we don't get to them during today's conversation, we'll do our best to respond to you afterwards. So let's get started. First off, I always like to start off these conversations kind of getting the lay of the land. Cecilia, can you give us a high level overview of some of the research TransUnion conducted around holiday consumer purchases, travel and e-commerce fraud?

Cecilia Seiden/VP Retail, TransUnion:

Sure, Andrew. So TransUnion actually conducted several reports this holiday season to start, we conducted US consumer surveys around holiday shopping and travel to understand consumer sentiment heading into the holiday season. We ask consumers about how they plan to shop and travel, how much they plan to spend and what their expectations are from retailers and hospitality and travel providers. So some of the areas that we probed on are the attributes that drive consumers making processes and spend levels as well as mechanisms for financing their purchases and how they might be stretching their budgets as well as concerns about fraud. In addition to those reports, we also ran our annual analysis of e-commerce transactions during the Cyber five, which are the five days from Thanksgiving through Cyber Monday. So we looked at the number of transactions that we suspect might be fraudulent, how that compares to prior years and the rest of the year, and what the key drivers of fraud appear to be in terms of indicators. And then finally we also ran our regular US consumer quarterly pulse survey, which gauges consumer sentiment around current and future household budgets, spending levels and debt.

Andrew Goss/Host:

Got it. Well, I like to say it's I guess a cornucopia of holiday research. So I think this next question is appropriate for both of you and love to hear your thoughts regarding holiday spending. What did we find around that? And also payment methods consumers said they're using for those holiday purchases. And also as importantly with today's audience, what can businesses do with this intelligence?

Charlie Wise/SVP Research & Consulting, TransUnion:

Sure, Andrew, I'll start off with that and I want to refer back to some of the insights that we get regularly from our TransUnion consumer pulse survey. We conduct a quarterly survey really trying to understand the sentiment of consumers, how they're feeling, what they're planning on a broader level than the specific studies that Cecilia mentioned. And the one point that we were definitely drawn to is that 56% of consumers in our fourth quarter survey just a couple months ago, reported optimism about their household finances in the next 12 months. And this is really important because an optimistic consumer is a consumer that's more willing to spend and is more willing in some cases to borrow to finance that spend. In other words, they may not have the money in their account right now, but they feel good about maybe putting on their credit card, paying it off over a couple months or using some other type of deferred payment method, be it buy now, pay later, or store cards, whatever the case may be.

And that optimism level actually is higher for the younger consumers. The Gen Z consumers, 64% of them noted that they're optimistic, they expect their incomes to increase over the next 12 months, and that's 71% of millennials. So if you think about who some of the heavier shopping and maybe even traveling of the population, these younger borrowers, the fact that they feel optimistic, they feel like their wallets are in pretty good shape right now, we think really pretends well to what we expected they responded in terms of their spending outlook and what they're capable of doing. So maybe Cecilia then you can take us through some of the more specific findings about what consumers did say.

Cecilia Seiden/VP Retail, TransUnion:

Absolutely. That optimism really seemed to carry through in the holiday shopping and travel reports that we ran as well. What we saw is that consumers are actually in a much more financially resilient position than we might've expected with all the negative headlines in the press. So consumers are excited to spend this holiday season and we saw that 54% of consumers plan to spend the same as last year at an aggregate level and only 16% plan to reduce their spend despite some challenging economic conditions. We also found that more than half of consumers are spending over $500 on gifts this holiday season, which was actually a 42% increase from last year. So pretty significant. We've been seeing a strong labor market with wages outpacing inflation and concerns that we had around student loan repayments have really been lighter than we imagined. About 80% of consumers say that resuming student loan repayments will have no effect on their holiday shopping, which was quite surprising to us.

We did definitely see some differences in spend behavior along income levels, generation levels as well as households with and without children. So as you might expect, high income millennials with children make up a disproportionate percentage of those that are planning to spend more than last year. So two thirds of those millennial households we're planning to spend more and given that inelastic demand for gifts for children, it does make sense that we would see that. But we were also surprised to see that that resilience held up across the income spectrum as well. So about 40% of households planning to increase their holiday spending actually came from middle and low income families, as we've seen pretty strong wage growth in that segment of the population as well. Last comment that I wanted to make on that subject, even though those spend levels are remaining the same or in some cases increasing, we did see that consumers are planning to shift to more practical gifts this year.

So a third of households were planning to give gifts like gift cards and 28% are actually planning to buy fewer gifts. So we are seeing that people are making some trade-offs to stay within their budget and still kind of make their friends and families happy this holiday season. In terms of payment methods, as Charlie said, we did find that consumers don't seem to be overextending themselves, so about 37% of consumers plan to pay for their purchases with either cash or a debit card and about 35% plan to pay with a credit card, but with the intention of paying off their balance before their statement is due. So really reassuring to see in terms of what businesses can do with this information. I think the key finding that we're seeing is the importance of knowing who your consumer is and who your target segment is. Given some of the differences in behaviors that we called out between families with children and without children, those generational differences, even regional differences, it's really important to have those mechanisms in place to know who your consumers are and target your messaging and your marketing accordingly.

Charlie Wise/SVP Research & Consulting, TransUnion:

So to your point about the practical gifts, I guess instead of the golf clubs, I was hoping for Christmas I should play on socks, right? Unfortunately, hopefully. But we did see that from the data that had been published that the holiday shopping, that in fact the sales have been off to a pretty good start with Black Friday and Cyber Monday up pretty well over last year. Is that what we're seeing?

Cecilia Seiden/VP Retail, TransUnion:

Yeah, I would say so far the results we're seeing aren't necessarily significantly higher than last year, but they do appear to be higher than expectations going into this holiday season, which is really the key thing to note.

Charlie Wise/SVP Research & Consulting, TransUnion:

That's great.

Andrew Goss/Host:

Yeah. Well, unless there's anything more on this topic, I'm sure we're going to circle back around on some of this. I think I have some follow-up questions around the federal student loan moratorium, but there's a lot to unpack, so I hope people have their pens or pencils out. And of course we also, within the event description, we have some links to those, some of those reports if you want to check it out afterwards. And also just for anyone out there, I appreciate gas cards. I feel like there's a commercial out there. I don't know. I like the practical thing. So anyway, so on the topic of spending, I was really intrigued and I don't remember ever seeing us do anything around this, around travel research around that. And I really found it intriguing. And specifically you talked about spending for those with and without kids, and I think this report I took a quick glance at it really went into that as well. So can you go into some of those findings and then what businesses can do with this intelligence?

Cecilia Seiden/VP Retail, TransUnion:

You're right. This is the first year that we did a travel survey in addition to the holiday shopping survey. And we thought it was a really good compliment, especially to see if there were any trade-offs between discretionary spending on goods and gifts versus travel. And similar to what we found in the shopping survey, consumers are excited to travel this holiday season as well. In general, almost half of consumers are planning to travel, about 31% are traveling to see family and about 18% are traveling for vacation. So some pretty strong numbers there. And we see that even more so with families, with children, they're even more likely to travel. So over half of families with children plan to travel this holiday season with 33% visiting family and 24% planning a holiday vacation. And as those of us with kids know, it's really important to take advantage of some of those breaks off from school, you're already having a disruption in your routine, your activities, possibly childcare, and so it's a nice time for families to try to get away.

What I also thought was interesting was looking at some of the reasons why the 52% of consumers who are planning to stay local aren't traveling. And while budget constraints are a factor affecting about 8% of those that aren't traveling, a bigger reason was actually people not wanting to deal with travel related stress. So it can be busy, it can be chaotic. Some people don't necessarily want to take that on, and especially those households with children were nearly three times as likely to cite those travel stresses as the reason why they're staying local. So I thought that was pretty interesting to see.

Andrew Goss/Host:

Yeah, that is interesting, especially in light of some of the travel troubles that occurred right last holiday season, certainly might be top of mind as well. Anything else in that area, Cecilia, or should we move on to the next area?

Cecilia Seiden/VP Retail, TransUnion:

Yeah, so a couple other things that I wanted to note in terms of not overextending themselves, we actually found that consumers are paying for this even more conservatively than the gifts for holiday shopping. So 47% of consumers were planning to finance their travel with cash or debit cards and 40% using credit cards and planning to pay off those balances before their statement is due. So really conservative figures there. And then I think you had asked about the impact on businesses, so I did want to touch on that. Again, knowing who your consumer is and some of those differences, especially for families with and without children is really critical here. So I'll give you a couple examples in terms of how that plays out. When you look at how households with children under age six, they were a lot more likely to opt for relaxing trips.

So an all-inclusive vacation a cruise were good examples, whereas households with older children were a lot more likely to visit a big city and maybe have a more adventurous vacation. We also saw really different preferences in terms of airlines. So looking at your regular airlines versus your discount airlines and households with children we're much more likely to fly a discount airline. So nearly three quarters of travelers choosing to fly a budget airline are those families with children versus 58% of those planning to fly a major airline align. When you think about families having to purchase multiple tickets for multiple family members, it seems that airfare is a place where they're probably looking to get some savings. So what we would to companies is really making sure that they're collecting data on their consumers and who they are, enriching that data with demographic attributes and lifestyle attributes and really leveraging that through their loyalty programs as well to be able to get them the right message at the right time. So making sure that those families with young children are getting the relaxing vacations and the families with older children might be getting some of those active promotions.

Andrew Goss/Host:

Very interesting. So we've just talked about, and before I go on, anything else from either of you on this topic?

Charlie Wise/SVP Research & Consulting, TransUnion:

I guess one thing I would say is it's interesting that consumers are talking about conservative approaches to financing and not necessarily wanting to put this on their credit cards. And it is possible that some of that conservatism may be a response to the fact that we have seen a pretty dramatic runup in terms of consumers, their credit card balances, their overall debt levels certainly are up, but credit cards really have seen a pretty significant rebound back to, and then well beyond what we saw in the pre pandemic era, there's a big drop in through 2021 and now average credit card balances per consumer back over $6,000. That's a level that we haven't seen since about 2010. So I think some consumers may be feeling that they're kind of approaching their maxed out limit in terms of how much they feel comfortable carrying on credit cards. They still have plenty of available credit limit, but to say with interest rates where they are right now, maybe it's a good time for me to think about living within my means and spending what I can afford to pay immediately and not necessarily adding debt already very high debt levels.

Andrew Goss/Host:

Yeah. Okay. Well, I mean we're talking about a whole lot of spending and some significant increases, especially Cecilia touched on the level of spend for those holiday purchases. My assumption would be fraudsters are ready to take advantage, let's delve into fraud and those fraud findings. Cecilia, let's talk a bit about the holiday retail digital fraud findings and again, the business actions that can be taken based on some of this intelligence.

Cecilia Seiden/VP Retail, TransUnion:

Sounds good. So the fraud analysis that we did, again concentrated during those days during the cyber five found that 2.4% of US-based e-commerce transactions are suspected to be fraudulent. So as you mentioned with peak holiday shopping activity also comes increased fraud activity. And what we saw is that those suspected fraudulent attempts were 18% higher than that same time a year ago and 12% higher than what we typically see during the rest of the year. So looking at January through November 22nd. So we are definitely seeing that increased productivity as we would've expected. And some of the reasons for that are, one, it's a lot easier for fraudsters to evade detection when the transaction volume is so much higher, so they feel like they can hide among the masses. They might suspect that merchants are loosening some of their fraud controls to make sure that they're able to take advantage of the good transactions that are coming through.

The second reason for that is that it's easier to scam consumers when they're already in shopping mode and interacting with merchants. So fraudsters might use a variety of phishing techniques to try to get information out of consumers while they're already in that shopping mentality. The third one is that just like us, fraudsters are motivated by deals too. So thinking about something like promotion abuse, you might see fraudsters taking advantage of deals to stock up on merchandise, buying them low and then reselling them at a higher price and being able to maximize that margin. And then finally, challenging economic conditions also create need and opportunity for fraudsters. So they're also facing inflation, higher interest rates, the same things that are affecting consumers. And at the same time unfortunately, they know that consumers are strained and maybe more likely to fall victim to what they perceive as a good deal in terms of what businesses can do with some of that information, a few different things.

So one, we looked at in the cyber five what the most popular day for fraud was, and it was actually Thanksgiving Day. So thinking about staffing for next year and setting their rules next year, making sure that they've got appropriate coverage during the holidays and on Thanksgiving is definitely a key one. But also putting mechanisms in place to address points of vulnerability and warding off fraud like account takeover, incentivizing account creation and logins to place order so that you are more likely to catch suspicious behavior if you know what a typical logged in user is doing. And then using consortium data and making sure that you can leverage information that other retailers or other industries around you might have on fraud, and you might be able to get a little bit of first mover advantage and prepare yourself for any potential attacks.

Andrew Goss/Host:

Interesting. And you never think about, at least I don't think about socioeconomics when it comes to fraudsters, but that was really an interesting point you got to there, Cecilia. Okay. Anything else on this point before we kind of get back to something we briefly touched on earlier?

Cecilia Seiden/VP Retail, TransUnion:

I think the only thing I would point out for retailers in particular is when we looked at the top indicators of fraud, what we found to be the two were unusually high volume coming from either a single IP address or a single device, which is typically consistent with automated attacks, especially bot attacks. So again, making sure that they've got the right controls in place to detect those types of behaviors, that those points of vulnerability will be incredibly important.

Andrew Goss/Host:

Got it. Okay. Well, I wanted to circle back around something that we touched on earlier that I know we have a plethora of information on the end of federal student loan forbearance. Let's talk about that and some of our research and then obviously tie it into if we can to holiday spending. Any conclusions we can draw related to that?

Charlie Wise/SVP Research & Consulting, TransUnion:

Sure. Happy to kick that off. And one of the interesting things that we saw, again from our consumer pulse when we asked consumers, did you expect this? Did you see it coming, that 65% of consumers that hold student loans said that they were caught off guard by the announcement earlier this year, that student loan were going to resume repayments in October. They weren't expecting it. Many consumers had gone years in some cases, had never made a student loan payment for those recent graduates and weren't necessarily planning for it, weren't budgeting, so it caught them off guard. And a lot of consumers have had to then really change their calculus around their budgets, their spend, how much they spend on discretionary items versus necessary. And that's something that I think consumers have really had to get their arms around as they go into holiday shopping periods, which I mean, as much as you could say, yes, your kids are going to need presents, it really is a discretionary area.

I mean, if it comes down to paying the rent, keeping the gas on or buying holiday presents or going on a holiday trip, some consumers are going to have to make some hard decisions. So the interesting thing to keep in mind is student loans get a lot of press, a lot of people think about them. It's not everybody, in fact, it's not even a majority of consumers that are impacted by this. In fact, TransUnion has done pretty extensive studies on this. About 27 million consumers have student loans that we estimated we're going to either resume or start making payments in the October timeframe. So 27 million out of the whole adult population, it's about 10% of the adult population that was going to face new or resumed payments. It's not even close to a majority, but for that 10% it probably means a lot. And when we'd ask consumers, 58% of them said they expected to be able to pay their student loans in full, but about 30% expected to be able to only make partial payments, and 13% said that they didn't have in their budget to pay anything on their student loans.

So it will be interesting as we start to see the data actually come in, how many of them are paying and how many of them are able to make full or even partial payments. But I think the important thing is how that is going to change what happens with the rest of their wallets, how much that can impact their discretionary spending. About a third of consumers with student debt actually said that they would reduce their discretionary spending as a result of having to make student loan payments. And certainly things like travel dining out and even holiday gifts would probably be considered discretionary spending, but it'll be interesting to see what the actual impact has been. And if we dig down in some of the postmortems at the holiday time to see our spend levels by those consumers with student debt, have they actually been impacted versus what we've seen before?

Cecilia Seiden/VP Retail, TransUnion:

Great. And I would echo a lot of Charlie's sentiments here. It was surprising to see that most consumers are not affected by student loan repayments. So almost 80% of consumers said that resuming those repayments would have no impact on their holiday shopping. What was interesting is that even of the ones that do have student loan repayments, a lot of them said they wouldn't be impacted because they'd already been paying the student loans all along, or because they'd actually finished their holiday shopping before those student loan repayments were going to begin. So it seems like a lot of them were really well positioned, and of those that would be impacted, most of them actually said that that impact would be small to moderate. There was really a minority of consumers that said it would have a significant impact in terms of their holiday shopping. We dug a little bit deeper into those that did say that they would be impacted, and we actually found that 50% of them still plan to spend more than last year on their holiday shopping. So again, I think that's really closely tied to the fact that if you've got children in the household, gifts are really a place where you're going to struggle to cut back. You still have to make those kids happy. And so you're going to find parents making budget adjustments, maybe using credit or finding a way to figure it out and still give their family a great holiday. Okay.

Charlie Wise/SVP Research & Consulting, TransUnion:

I'm still very impressed by those parents or frankly, anybody that can get their holiday shopping done before the end of September. That's a pretty impress.

Cecilia Seiden/VP Retail, TransUnion:

I'm too, I'm not one of them.

Andrew Goss/Host:

I certainly saw that and I, I think, right, looking back at the holiday study survey, it did seem like there's still that Black Friday cyber Monday period, even though people are starting early, it's still king, right?

Cecilia Seiden/VP Retail, TransUnion:

Yeah, I agree with that. And we are seeing a lot of reports that so far this season, the discounting is a lot deeper, and I think during Black Friday and cyber money, that was a lot more true than in prior years. So they are still having to use those discounts to incentivize consumers, especially with these economic times.

Andrew Goss/Host:

Yeah, great transition. As long as, do we have anything else for federal student loans? Okay, all good. All good. Well, yeah, so that's a good transition. We've seen the news that inflation rates have certainly slowed, but I believe in consumer pulse we talked about a little bit of compound inflation. So I guess let's go into a little bit around inflation and some of our findings in our recent studies.

Charlie Wise/SVP Research & Consulting, TransUnion:

Sure, I'll start. You're exactly right. The rate of inflation has come down markedly peaked in 2022 at about 9.1% is now down really in that squarely in that three to 4% range, not quite at the 2% target, but making a lot of strides. But even that said, with the slowing of inflation, what you find is that we are still in a period where prices are consistently persistently higher than they were before. And a lot of consumers don't see the distinction between the rate of inflation and where prices are right now. All they know is they go to the store and a basket of groceries that cost 'em a hundred dollars before may cost them 130, 140. Now that feels like inflation to them. And when we ask consumers what their number one concerns were, and we listed out a range of different options, different things that keep people up at night, inflation continues to be the number one concern that is expressed by consumers.

44% of consumers say their number one concern is inflation and 79% have inflation in their top three list of concerns. So it's still top of mind for people. And again, that inflation mindset really does change the whole perception of how far your paycheck is able to go. And frankly, a lot of consumers have done quite well in terms of seeing increases in pay, but it doesn't feel like for a lot of consumers that pay has kept pace with how expensive things are right now. Rent, food, travel, discretionary items, even just buying lunch at work, an $8 sandwich now costs $12, and that's not coming down anytime soon. And I think that that really is reflected in when we ask consumers who do list inflation as one of their top concerns that about 58% of them say that reduced discretionary spend is a response that they're going to put in place to respond to that higher inflation. So we do think that that higher inflation, whether it's real, whether it's not consumers are feeling it and that makes it real for them, and that some of them report that they are cutting back on discretionary spending in response.

Andrew Goss/Host:

Yeah. Interesting. Cecilia, you have anything else to add on that or So shall we move on?

Cecilia Seiden/VP Retail, TransUnion:

No, we can go ahead and move on.

Andrew Goss/Host:

Okay, good. So I just want to let everyone know in the audience, right, we do welcome your questions if you want to put in the comments area. So just wanted to remind everyone that you have the ability to do that, and if you come up with a question after the fact, please put it in there and we'll do our best to circle back around with you. But I do have, I think one specific question more that I wanted to get to that I thought of during this conversation. We touched on it briefly on some of these areas, but what can businesses do to incorporate some of these findings at a high level beyond what you already shared? So I'll just turn it over to both of you on that.

Cecilia Seiden/VP Retail, TransUnion:

Sure, I can take that one first. So we've spoken a few times about knowing who your customer is. I just want to reiterate how important that is. And really it does double duty across marketing and fraud. So from a marketing perspective, you can target certain audience segments, you can personalize outreach and really use your budget more efficiently. So you're not spending your advertising dollars on consumers who are never going to buy your product. But on the fraud side, you can use a lot of signals associated with an account to detect any signs of fraud. So looking at the type of device that somebody is using, the IP address and the location that they're logging from, the type of purchase that they're making, and if that's consistent with their historical purchasing behavior. So really kind of incentivizing that account login through things like loyalty programs, offering points, offering free shipping.

Those are really important during the holidays, but really all year round. So wanted to make sure that that came through. We didn't have a chance to talk about it, but we did also ask consumers about how they're feeling in terms of retail loss. We're seeing a lot of organized retail crime activity. Consumers are noticing that more products are locked up in stores and many of them are having a negative reaction, so that can also affect their shopping experience. They might not want to wait for an employee or an associate to open those unlocked cases for them. They might be much more likely to shop online instead. So making sure that retailers are really thinking about that omnichannel experience and balancing the need to protect their inventory with having that great experience in store is going to be important as well.

Charlie Wise/SVP Research & Consulting, TransUnion:

Yeah, Cecilia, I couldn't agree more that the customer experience is just critical to ensuring that retailers are able to capture that limited consumer's dollar. I mean, consumers enter the holiday season, at least ones that are more rational than I enter with a budget and they know what they can spend and they're going to spend it on those retailers that don't just have the goods they want at good prices, but that they have a good experience. And whether that's in store or online as all of these issues with fraud, with theft, with all the things that retailers need to do to preserve their margins, to make sure that they're not seeing a lot of loss that's eating up their limited profit. They also have to remember that maintaining a good customer experience is critical for them to not just get repeat customers, but even if consumers are in store, if they're online, they can abandon very easily.

They can take their business elsewhere. If you're asking too many authentication questions, if as you said, you have to go get an associate to actually get the goods that you want, if you need to go through, jump through hoops to prove that you are who you say you are, all these things are things that on the one hand, consumers appreciate if you ask them in the abstract, but the reality is I just want what I want and I want it now. And trying to balance that experience with the realities of what it's going to take to operate in the world today is a really important trade-off. And again, I think as retailers, as lenders, as anyone operating that ecosystem is having to realize that finding tools that can take that burden off of the consumer to prove who they are or to verify that they're not fraudsters, it's going to be increasingly important to make sure that they are capturing that consumer when they want to transact and getting them incentive to come back and continue to shop with them in the future.

Cecilia Seiden/VP Retail, TransUnion:

Yeah, I couldn't agree more. I do think it's important to balance that customer experience with protecting yourself, your margins, your inventory. I think the great thing is we're seeing increasing fraud mechanisms that can really happen behind the scenes to validate an individual and that they are kind of who they purport to be. And we are also seeing at the same time that consumer perceptions of some of those security measures is becoming more favorable. So things like multi-factor authentication that before we're really seen as a burden and an increase in friction are now seeing as more of a welcome sign of protection. So when we kind of parallel path, both of those two things that the consumer can't see and things that the consumer can but are more favorable towards that will also help retailers, hospitality and travel providers, banks, anyone to more effectively mitigate fraud in the future.

Andrew Goss/Host:

Yep. It's so always all about balancing the cost of fraud versus the loss of the customer. I mean, that's really what it comes down to on that fraud level. Great. Those are some great takeaways. Anything else before, I think we're going to be running out of time here, but anything else you want to add either of you?

Charlie Wise/SVP Research & Consulting, TransUnion:

I'd just say I think we're at really interesting time right now. If you think about consumers and consumer spending, there's a lot of people that think that consumers close to tapped out in terms of their income, their savings, their borrowing capacity, and others that feel that there's a lot of capacity still left in the consumer. In other words, never count out the US consumer's ability to do what they do best, which is consume. So it'll be really interesting as we look into 2024 to see how some of these trends are going to play out and whether the 2023 holiday season is a last gasp or just a continuation of trends that we continue to see.

Andrew Goss/Host:

Got it. Okay. Well, thanks so much. You two. I guess we do have another question, and I'm not sure if we have the insights to get to this right away, but let's see. Jonathan Coyle, hope I got the name correctly, asks what trends do you see related to financial services regarding fraud prevention during the holiday season? Is there anything, any research or just anecdotal evidence that we can get to on that fact? And if not, we'll do our best to circle back with you after the fact, Jonathan?

Charlie Wise/SVP Research & Consulting, TransUnion:

Yeah, there's a lot that's there. And certainly we see that the fraud trends that we've been following through and following the pandemic have been really interesting. As fraudsters continue to get more and more sophisticated, they're really good at responding to the whack-a-mole game, which is where you see instances of rising fraud. All of a sudden lots of resources go to that, stomps that out, and then very quickly the fraudsters just shift. They shift their tools, they shift their approaches, they shift what their focus is, and they're always seemingly one step ahead. And I think the trends are mostly that that financial services providers as well as just frankly anybody who is acceptable of fraud, which is just about every industry these days, any kind of consumer industry needs to take a multifaceted approach. They need to look at consumers at devices, they need to use all sorts of different tools to detect this and to combat this. And again, putting all your eggs in one fraud detection or prevention basket is really just going to open you up to a lot of vulnerability. So it's just creating a lot more complexity on the part of organizations to manage all of these different emerging risk areas or threat areas.

Andrew Goss/Host:

Thanks, Charlie. So we have another comment, and I think it's a question, and it's also related to fraud. So apparently that is the hot topic right now in the chat. How are bad actors combining fraud and abuse during the holidays? I feel abuse is not talked about enough since bad actors usually engage in both behaviors.

Cecilia Seiden/VP Retail, TransUnion:

Sure, I can take that one. So by abuse, I assume that you're referring to promotion abuse. We talked a little bit about it, but we can go a bit more in depth. You're right, we definitely do see those operating in tandem. So promotion, abuse, especially using something like email tumbling where you're generating lots of different email addresses and opening up additional accounts to take advantage of giveaways or discount codes is definitely something that we see as increasingly common and also very much tied to organized retail crime. So again, thinking about how you can buy product and then resell it somewhere else and hopefully get a profit, that's a behavior that we are seeing more of these days as well. What was interesting to me is that promotion abuse last year was actually one of the top two drivers of fraud in that holiday fraud analysis that we did. And this year it kind of slipped down in the ratings with some of those automated attacks becoming more prevalent. That might be because some of those retailer fraud mechanisms are getting better at catching promotion abuse or fraudsters are just finding more creative ways to get around some of those mechanisms with those bot attacks instead.

Andrew Goss/Host:

Got it. Well, if there aren't any other questions right now, I think this is a good stopping point. And thank you to Cecilia and Charlie for these great insights. The breadth and depth that you covered, everything is just absolutely amazing, and the ability to retain some of that data is amazing as well. And of course, a special thanks to our audience for joining us. If you didn't get to your question today, again, we'll do our guess best to get back to you soon. And feel free to pop something in the chat after this conversation to download all of these recent studies. There's a lot that we pulled from for this conversation. We'll be putting the web address for them up on the screen, and you can always go to the LinkedIn live event page and we have links there as well. So until next time, we'll see you next time on TransUnion Live. Take care. Happy holidays.

Cecilia Seiden/VP Retail, TransUnion:

Thanks. Thanks.