(PartiallyPolitics.com) – The emerging issue of first-party delivery fraud is becoming a significant economic concern in the United States, as reported by Socure, a company specializing in digital identity verification. This type of fraud, which involves consumers falsely claiming they didn’t receive a package when in fact they did, is costing U.S. businesses and financial institutions more than $100 billion annually. This deceptive practice not only affects the companies directly but also contributes to inflation, as businesses are forced to raise prices to cover their losses.
A recent survey by Socure highlighted the extent of this problem. It revealed that 35% of 1,000 Americans, aged between 18 and 77, admitted to engaging in first-party delivery fraud. Yigit Yildirim, a senior VP and general manager at Socure, described this fraud as “buying and lying”. This can include actions like falsely reporting a lost delivery to receive a refund, failing to pay off credit card bills, making purchases with no intention of repayment, or disputing legitimate financial transactions.
Alarmingly, the trend is more prevalent among younger consumers. The survey found that 52% of Gen Z respondents would commit this fraud if they were confident of facing no repercussions. Furthermore, 20% of Gen Z participants do not consider this act ethically wrong, a rate three times higher than that among Baby Boomers.
Yildirim pointed out that this type of fraud affects a wide range of financial institutions and businesses, including banks, credit unions, lenders, fintech companies, and even cryptocurrency platforms. The impact is also felt on platforms like Amazon, where third-party sellers are prohibited from sending unsolicited packages to customers. Amazon advises customers to report any unsolicited packages they receive, which are not gifts, to combat this fraud.
The consequences of first-party fraud are far-reaching, with Yildirim warning that the cost is ultimately borne by consumers through higher prices and fees. Data from FICO indicates that first-party fraud accounts for approximately 10% of credit volume losses and over 20% of the value. Yildirim also noted a shift from in-person theft at physical stores to online scams, with outdated regulations and inadequate data sharing making it easier for fraudsters to exploit the system. Without effective measures to address this issue, first-party delivery fraud is likely to become an increasingly pervasive problem.
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