Survey: Gen Z most-likely to commit ‘friendly fraud’

PITTSBURGH — Businesses and credit card companies are trying to fend off a rise in fraud.

A new survey from the digital safety company Sift found younger consumers are most likely to file a fraudulent dispute with their credit card company.

The survey found 42% of Gen-Zer’s admitted to doing this.

“We as consumers go ahead and dispute a charge even though we might have received the item or service and are satisfied with it,” said Rebecca Alter, Trust and Safety Architect at Sift.

It’s called friendly fraud or chargeback fraud; when a cardholder identifies a transaction as fraudulent even though they or someone else in their house may have made the purchase.

Alter said it’s not always intentional; it could be an honest mistake, possibly among family members who use the same credit card.

However, she said fraud is also fueled by “inflation anxiety” and the belief that keeping an item and getting a refund on your credit card won’t hurt a big company’s bottom line.

“Who cares if I get this large item for free because it’s not going to really hurt a Walmart or an Amazon,” Alter said.

But it does hurt them.

Sift estimates that retailers lose $24 billion a year to return fraud, which leads to higher prices.

If you own a small business, Alter recommends ensuring you keep all your receipts and a record of services because the burden of proof is on the business, not the customer.

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