Why the rich love digital shoplifting
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Well-off Americans are more likely to steal from online merchants than the poor, and they do it in enormous numbers: In a new survey, 55% of Gen Z and 49% of Millennials earning more than $100,000 a year said they have done so in the past year, per antifraud tech company Socure.
Why it matters: First-party fraud, as it is known in the trade, is so socially acceptable, especially within younger generations, that its perpetrators are happy to admit to it even when a stranger asks them about it in a poll.
- Many say they feel no regret, and 46% of them say they see their actions as consumer advocacy.
The big picture: In many ways it is easier to steal from online merchants than it is from brick-and-mortar stores. You simply claim the package was stolen or never delivered, or you dispute the charge via your credit card company, or you say you never made that losing sports bet.
- Such actions, it seems, come easier to the rich. Some 33% of those earning more than $100,000 per year say they have done such things in the past year, per the Socure survey, compared with 18% of all those polled.
- In that sense, first-party fraud is the flip side of retail theft from physical shops, a crime that the poor are more likely to engage in than the rich.
- It also puts the fraudster in much less personal peril. If you dispute a legitimate credit-card charge, the worst thing that is likely to happen is that the merchant will persuade the card issuer that the charge was kosher, and you end up having to pay it after all.
Zoom out: Kris Nagel, the CEO of digital fraud prevention company Sift, wrote last year that younger Americans are more likely to engage in such activity for three main reasons.
- They convince themselves that their actions are necessary or justified given the current economic environment.
- They are exposed to online influencers who promote fraudulent "hacks" and show how easy they are to execute.
- They see their behavior as a victimless crime, given the size of the merchants they are dealing with, or they don't view it as a crime at all.
By the numbers: 63% of first-party fraud offenders say that large retailers can afford to cover the cost of disputed legitimate claims, per Socure.
What's next: Ori Snir, a fraud expert at Socure, expects these numbers to continue to rise "as more and more people learn how to do these things online."
- "They heard one of their friends did it and got away with it. So why wouldn't they do that?" he notes.
- Alternatively they got away with it in the past — possibly even through an honest error rather than through deliberate fraud — and therefore know how easy and lucrative it can be.
The bottom line: The appeal of getting stuff for free is eternal, especially when it can all be engineered with a few taps on your phone.
