There are many that would welcome the opportunity to weigh in on one particularly ‘trending’ question getting lots of attention right now: Why did it become appropriate to steal and brag about it? Gen Z, those born between 1997 and 2012, have expressed more
willingness than any other generation to commit online fraud.
Opinions among those studying this phenomenon vary. Some consumers – especially younger ones – have simply decided that they deserve a greater ‘piece of the pie,’ in various transactions. They’re asserting this judgment by effectively stealing all or part
of the value of products or services offered as brazenly and openly as if they grabbed them right off the shelves of their local retail stores. Then, in what’s become an even more vexing escalation away from ‘standard practices’ of the past, they are sometimes
even bragging about it online and/or to their friends.
Insight into this issue comes through several recent surveys, including one in particular taking flight on social media right now from
Socure and referenced by many
publications and pundits (Thanks, Annabel Burba and Inc. for a succinct summary.) These inventories of selected participants’ views on ecommerce rules - and hacks being devised and widely recommended to ignore them - illuminate a trend
that should be very troubling for banks, fintechs, and online marketers.
According to Adyen, this generation tends to look at shopping as ‘experiences’, yet at the same time, per
Socure’s new study and
Sift’s earlier published findings, they might not subscribe to the ‘same old’ rules on just what a balanced financial interaction looks like, agree with what
is really considered ‘theft’ – or even what constitutes fair play – in the modern marketplace.
How striking are the generational differences? Well, in Socure’s recent study of 2,000 higher income consumers, 55% of Generation Z respondents and 49% of Gen Y/Millennials, admitted to stealing from online merchants by committing fraud in some form against
them during the past year. Meanwhile, only 29% of Gen X respondents and 3% of Baby Boomers surveyed replied the same.
In fact, according to Socure’s study, “first-party fraud costs businesses over $100 billion annually”. Yet in their survey of 2,000 Americans in December 2024, “nearly 40% of Gen Z and 23% of Millennials” (all claiming to make more than $100,000 per year,
an important distinction in itself) admitted to committing such fraud over the holiday period alone.
The general reasons or excuses supplied to explain such behaviour, Socure says, include “revenge fraud” involving deliberate dispute of legitimate charges, “perceptions of harmlessness and lack of regret” (39% of Americans believe first-party fraud is harmless,
26% of those committing it don’t regret doing so), and 51% of first-party fraud perpetrators admit to doing so via misrepresenting their identities and financial situations to product providers.
This isn’t what ‘open banking’ and ‘modern commerce’ are supposed to mean, is it?
Financial services organisations and financial technology providers are caught in the middle of this quandary. That’s because nearly everything they do surrounds money, currency, and supplying, servicing, or innovating around the many ways people and businesses
finance production, pay for things, get paid, or manage the funds or assets they receive.
Banks, credit unions, and fintech firms are also involved in constant, concerted, and often caustic competition, amidst increasing calls in the US to ramp up
open banking and provide greater financial inclusivity, and beyond national borders, facing growing pressure to capture more of the
online shopper’s wallet share across the globe.
We’ve covered here in Finextra some of the most egregious,
current examples of what can go wrong when supposed ‘unmissable’ opportunities for ‘fun and profit’ in financial products online meet and mix with the realities of overstated or misstated functionality - and often exceedingly hyped expectations.
Many ‘great deals’ or gamified approaches to traditional saving and paying practices don’t always turn out to be so great.
There are many legitimately helpful, affordable, and even more financially rewarding new products offered by companies – traditional or otherwise – in the financial services arena than ever before, which is a positive trend for the industry.
Unfortunately, some supposedly ‘innovative’ solutions and apps advertised and relentlessly marketed to enthusiastic – and often, younger, less financially savvy – buyers on the internet either directly or through various forums and referral sources have
instead led to - for many - groans of “Oh No! What happened to my hard-earned cash?”
Where’s the disconnect for younger buyers, and how has the definition of ‘win-win’ changed?
The problem is that most business models are based on someone/some company/some organisation offering a product to a customer at an agreed price and expected profit margin. The buyer of the product or service sees the value in it and willingly (or unwillingly
– perhaps another wrinkle to the argument to be debated another day) pays that value – as mutually agreed – to purchase or use it. They do so in whatever currency or medium of exchange is available or preferred, according to terms that make sense for both
sides to do so. Everybody’s happy at that point, right?
Unfortunately, in our transition to a substantially digital, online economy from ‘the old ways’ of doing business in person, or by mail, or possibly even before recent ecommerce practices exploded, in earnest, during and after the
Covid pandemic, we seem to be losing the shared agreement regarding what constitutes the true value and sensible course of a win-win transaction. Or at least some of us in
society have. This troubling development has led many to ask, why is this generational or even broadly societal divide in expectations and views of ‘acceptable’ behaviour widening, and what can be done to close the gap?
Why now, and how to compare modern online theft to ‘standard’ shoplifting, or bank robberies?
It’s no joke to consider these statistics in light of the oft-forgotten reality that losses from actual bank robberies by masked ‘bad guys’ - as we’ve seen portrayed and even glorified in movies and popular media - add up to a whole lot less these days.
The latest available (2023) FBI crime
stats tell the tale in numbers, but they only provide (online) the per-robbery figures as of
2019, and it’s just over $4,200 for ‘average dollar loss’ by financial institutions from each incident.
A quick calculation, even multiplying last year’s robbery incidents vs. 2019’s per-robbery loss totals for about 1,250 reported attacks on banks, savings institutions, and credit unions indicates we’re talking about less than $8 million in stolen funds last
year. Even doubled, tripled, or deals quintupled, that’s an amazingly smaller figure than other malevolent means of stealing.
Indeed, so-called ‘white collar’ crimes cost society billions and maybe trillions of dollars more than these more famous offenses, and the list of available avenues
for fraudsters and criminals in this category as documented on the FBI’s site is long and growing every day. Now, this growing category of online crime, especially as it is reported being perpetrated by individuals of higher income levels, takes the term ‘shoplifting’
to a whole new low.
It’s a trend that has been decried by some, applauded by others, and debated by many in communities across the globe. It’s as close to many of us as – especially if we’re business owners or operators – as the jarring ‘smash and grab’, aggravated shoplifting,
or burglary attacks in your local communities – the ones that have been played up and played often on news channels the world over.
Maybe such crimes aren’t common in your community, but it’s not just happening in Beverly Hills, or the Bronx either. Even tonier shopping districts within the
City of Good Neighbors - my former home of
Buffalo, New York - are being targeted for quick and destructive theft and burglary hits ‘against the man’ – merchants which are justified as ‘fair game’ and somehow able to afford the losses – by common criminals.
What can be done to stem the tide of the ‘new’ ‘online shoplifting’ phenomenon?
This growing willingness to break the rules ‘because it’s the smart thing to do’ or because ‘it won’t really hurt anybody’ may be fueled by social media influencers, populist politics, lack of financial education or awareness, or perhaps by fundamental disconnects
between financial services providers, their own business customers on and offline, and consumers and businesses who commit the offenses. All of these factors may play a part – amid an unhealthy blending of incendiary, polarising, and often incorrect assumptions
and claims about the real or perceived ‘costs of doing business’ within society.
If so, and if short-circuiting or circumventing the ‘rules’ traditionally assigned to equitable purchase and trading relationships has become more acceptable and comfortable to more people, especially - as the surveys seem to show - younger participants
in our modern economy, what does this mean to those who try to play the game fairly according to those rules? How can this troubling trend be turned around?
The question banks, credit unions, fintechs, and honest consumers must jointly address is what can they and society do to change behaviours and cost-effectively thwart these attempts to ‘tip the scales’ in favour of those who simply want to steal more gains
to benefit their own personal possessions or financial portfolios?
Sure, the crimes they commit may not be perpetrated in-person – and no doubt they may not be nearly as physically or emotionally violent as those carried out by ‘smash and grab’ attacks or even quiet, unobserved shoplifting in the real world. Yet the escalating
trend of committing and crowing about schemes and scams that allow consumers and businesses to illegally twist the rules and financial conditions to their own benefit are bound to increase the costs for all - in a world increasingly dependent on growing the
economy using ‘convenient’ ecommerce transactions.
Doing the right thing, in all things, is still the golden rule. Where has that message been lost in our modern, supposedly evolved world?