Eye on Consumers: Organized Fraud Is up 44%; Holiday Spending Could Exceed Pre-Pandemic Levels

With the fourth quarter under way, fraudsters are increasing the sophistication of their attacks while consumers are gearing up for a busy holiday-shopping season, albeit with different goals.

First, a new report from Au10tix, an Israel-based identity verification and management provider, found a 44% increase compared to preceding quarters in organized identity fraud in North America in the April through June quarter. Contributing factors are the ongoing economic recovery and inflationary pressures, particularly in the United States, Au10tix says.

The surge is particularly strong in North America and not as evident in other regions, the report says. “So why don’t we see a similar trend across all regions? Simple—the economic recuperation of the U.S. has inadvertently created an environment that empowers proficient syndicates specializing in identity fraud,” Au1otix says.

Another troubling component is that payments appear to be more attractive to organized criminals than commerce, “with 32% of attacks from this sector compared to the latter’s 12%,” the report says.

Meanwhile, consumers are projected to spend big this holiday shopping season. Advisory and consultancy firm Deloitte predicts that U.S. consumers will spend $1,652 on average this holiday season, a 14% year-over-year increase. That is more than the 2019 average.

Also, 72% of consumers—4,330 consumers were canvassed in early September—expect higher prices and will spend accordingly. Additionally, the average consumer intends to spend $300 on gift cards, up from $217 in 2022.

And while e-commerce remains a strong sales channel, consumer preference for in-store shopping has returned to 2019 levels, with consumers planning to spend 37% of their holiday shopping budget in store (it was 36% in 2019). Interestingly, just 28% of consumers plan to use the in-store/e-commerce hybrid buy online, pick up in store option, down from 35% in 2022.