Saturday, April 13, 2024

Generation Z is becoming generation fraud

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Members of generation Z — those born in the mid to late 1990s — are more susceptible to fraud than other age groups and are also committing it at a higher rate.

The latest Digital Trust and Safety Index, released today by Sift, shows that 33 percent of Gen Z survey respondents know someone who has, or have personally, participated in payment fraud, compared to only 10 percent of Baby Boomers.

In addition, 34 percent of Gen Z consumers have seen offers to participate in online fraud, compared to only nine percent of Baby Boomers.

“These generational divides are blurring the line between bad actor and consumer,” says Kevin Lee, VP of trust and safety at Sift. “Younger generations are composed of digital natives who are both facing troubling levels of economic anxiety and tend to be more trusting of digital spaces — often at the expense of their online security. They’re also exposed more often to offers to participate in fraud schemes. These converging factors mean merchants and payment processors have to think differently about the full spectrum of risk and how to stay ahead of it.”

The report also shows that specific industries have experienced major spikes in attempted payment fraud: iGaming saw a 93 percent increase, ticketing saw a 68 percent increase, food ordering and delivery saw a 53 percent increase, and retail saw a 46 percent increase.

Findings from Sift’s survey of 1,052 adults (aged 18+) across the United States in February 2024 highlight the impact of digital risk on economic uncertainty, revealing that the increased threat of AI-powered fraud is already influencing consumers’ online shopping behavior. 30 percent of those surveyed say they shop online less frequently due to the cybersecurity threats posed by artificial intelligence, and 76 percent would stop using or shopping on a site where they had been a victim of payment fraud. With 43 percent of consumers saying they have been a victim of payment fraud at least once in the past 18 months, there’s potential for an impact on businesses’ revenue if the industry fails to get ahead of payment fraud attacks.

“As consumer spending habits evolve and fraud becomes supercharged by AI, businesses need to fight fire with fire, and leverage AI to their own advantage. It’s a necessary piece in the growing challenge of delivering consumer experiences that are seamless and secure,” adds Lee.

The full report is available from the Sift site.

Image creditshmeljov/depositphotos.com

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