A dark side of economic hardships and digital dealings was exposed in a recent report that discloses a worrying trend among Generation Z: an increased readiness to practice online fraud. This is because this particular group of people born between 1997 and 2012 continually resort to deceit as they navigate through tough financial times.
The Sift quarterly index report showed that 42% of teenagers today contemplate making first-party fraud, i.e. disputing legitimate purchases with their payment providers. This figure contrasts sharply with the 22% reported by millennials who admitted having similar feelings. Additionally, this shows that Gen Z’ers either know someone who has committed payment fraud or have done so themselves (33%), much higher than other generations.
This phenomenon can be seen through the lens of the “fraud triangle” theory, which states that when individuals are motivated, justified, and provided the opportunity to commit fraud it is more likely to happen. Incentive-wise for Gen Z, there is no room for speculation; they are battling skyrocketing housing costs, student loan debt, and ever-increasing consumer prices amid stagnant wages.
An Intuit survey discovered that 73% of those in this generation feel it’s harder now than ever before to save money. Whenever they are in financial difficulties as such they therefore do not mind going out of their way just to look for cheaper alternatives from using coupons to buying second-hand stuff only that at desperate times some opt to steal credit information while others fake returns.
This also plays a part in branding loyalty among Gen Z. For them there is less moral obligation towards big firms whom young people may accuse as one of the reasons why are struggling financially. Therefore, this generation goes for affordability over brand loyalty often seeking cheaper alternatives or “dupes” which stand for premium products in other words. Their dislike for commitment extends to their spending habits with them tending to prefer rolling subscriptions and sharing services instead of outright ownership.
Furthermore, the fact that they are more online-minded than any other generation exacerbates this issue. They are influenced by social media trends and exposed to fraudulent cases given that they are always on the internet. 34% of Gen Zers have come across offers of participating in online fraud according to Sift while only 9% of baby boomers.
To combat this challenge, businesses need a more nuanced approach. This way, it is easy for the Gen Z audience to develop deeper emotional connections with companies by emphasizing authenticity and social responsibility. In addition, discounts, as well as flexible payments such as “buy now, pay later,” plus crystal clear return policies can also help reduce the temptation for fraudulence acts. What’s more responsive customer service and quick refunds could decrease instances of chargebacks.
Gen Z’s willingness to engage in online fraud demonstrates an intricate web of economic pressures, shifting consumer behaviors, and incessant influence from social media platforms. While this trend poses real challenges for businesses, it also underscores the need to understand and address the unique financial anxieties and consumption habits of this emerging generation.