Gen Z thinks payment fraud is acceptable because the economy is unfair

Generation Z believes the economy is so bad for them that committing fraud is justified, according to a new report.

SieveAI-powered fraud decision-making platform launched its first quarter report showing that a third of Gen Z either knows someone who has committed first-party fraud or has done it themselves.

Sift said the Zoomers were deliberately disputing accusations they knew were legitimate. The new findings confirm the company’s position Fourth Quarter Report which found that 42% of Gen Z admitted to committing first-person fraud.

The fraud rate among Gen Z is higher than any other generation. In the same first quarter report, only 10% of boomers said they knew someone who had committed fraud or had done it themselves.

Sift CEO Kris Nagel wrote in an essay in Forbes that while the data “may seem sensational,” it is actually “very revealing” about the state of the economy.

Nagel cited an Intuit study that found 73% of Zoomers find it difficult to save money. Young people are struggling with inflation, student loans and a housing crisis while wages are stagnant, he said. “These factors snowball into a stressful financial situation that makes it harder to meet daily necessities.”

“Faced with bad circumstances, some people will turn to stolen payment methods or chargebacks to get more for less,” Nagel wrote. “In these situations, consumers may rationalize fraudulent behavior by convincing themselves that their actions are necessary or justified given the economic environment. »

The CEO also said that Gen Z may not feel particularly loyal to the companies they’re looting and instead see big companies as one of the reasons for their financial woes.

“They may view their actions as a temporary solution, or even as a moral gray area with few consequences for anyone,” he writes.

While Nagel doesn’t have all the solutions, he offered some suggestions for combating Gen Z’s reported penchant for fraud. He suggests businesses emphasize social responsibility, offer flexible payment plans, ensure they have clear return policies and prioritize customer service.

“Gen Z’s willingness to engage in online fraud reflects the complex interplay of economic pressures, changing consumer behaviors, and the influence of social media,” he writes. “This trend, while having real business impact, stems from a context of financial stress, a desire for affordability, and a distinct approach to brand loyalty and consumption.”