Consumers Are Increasinly Being Victimized by Fraudulent Activities on Gig Economy Platforms – Report

More than one-third of American consumers have been victimized by fraud while using gig economy platforms, like delivery and ride-sharing apps, according to a new report from TransUnion (NYSE: TRU).

This represents a 21% increase from its last survey of gig-economy consumers in July 2023.

Across generations, “less than half of respondents expressed concern over fraud on gig platforms.”

However, 75% said they would switch platforms “if their account were compromised or if they experienced fraud. These findings and more are part of a comprehensive study on the attitudes, behaviors and experiences of consumers participating in the U.S. gig economy.”

What this tells us is that consumers “place the onus for security squarely on the platforms. They have no problem leaving if they feel their information and identity are not being protected.”

Among those who’ve been victimized, 16% said “they’ve fallen victim once and 18% reported being victimized multiple times. However, Millennials made up nearly one-third (32%) of consumers who were victimized once while comprising 40% of those who fell victim multiple times.”

Tracey Lazos, senior director of TransUnion’s gig economy business, said:

“Millennials are among the power users for gig platforms, so it’s not surprising that they would encounter fraud at higher levels. However, Gen Z consumers are also power users but report far fewer experiences with fraud. We believe Millennials are being targeted at higher rates than Gen Z users due to their overall higher incomes.”

The report notes that gig platform consumers “face a variety of attacks and can fall victim to fraud or scams despite their best efforts to combat it. Identity theft and payment related fraud – either through inducing scam payments or via stolen credit cards – remain the most prevalent types of fraud on gig platforms.”

When it came to preventing fraud, consumers “placed the onus on gig platforms and their employees for maintaining security.”

While consumers accept a minimum level of friction “for verifying identity, they believe gig workers should have more stringent protocols in place.”

This was especially true for younger cohorts.

For example, 52% of Gen Z consumers said gig platforms “should use biometric verification on their workers while only 37% said the same should be true for consumers.”

Similarly, 44% of Millennial consumers “wanted biometric verification for workers compared to just 35% for consumers.”

Lazos added:

“What this tells us is that consumers place the onus for security squarely on the platforms. They have no problem leaving if they feel their information and identity are not being protected.”

Gig platforms interested in providing a seamless and secure experience for both workers and consumers should consider the TransUnion TruValidate solution suite “for identity insights, fraud analytics and omnichannel authentication.”

Adding to concern over the rise in fraud is “that it happened as consumers pulled back their spending on gig platforms.”

Nearly three quarters (74%) of consumers “reported spending less than $250 per month on gig services, compared to just 64% who spent under that level in July 2023.”

Spending decreased the most “among Baby Boomers—71% of whom reported spending less than $100 per month in the most recent survey, compared to 54% in the last survey. Millennials and Gen Z remain the power users on gig platforms, with nearly a third (32%) of both groups reporting their spend between $250 and $750 per month.”

In addition, consumers indicated that cost “was their top consideration when deciding which gig platform to use.”

The report notes that gig platforms “should explore ways to maximize efficiencies within their operations to allow for more competitive pricing.”

Research Methodology

This online survey of 1,028 adults was “conducted in February 2024, by TransUnion in partnership with third-party research provider, Toluna. Survey participants included adults 18 years of age and older residing in the United States- who participate in the gig economy as a consumer of gig services.”

Participants included current and future users of gig economy services.

The survey was conducted “using an online research panel method across a combination of desktop, mobile, and tablet devices. Survey questions were administered in English. All U.S. regions are represented in the study survey responses.”

To ensure general population sample representativeness “across United States resident demographics, the survey targeted respondents in line with the census statistics on the dimensions of age, household income, and region. Generations are defined as follows: Gen Z, born 1997- 2005; Millennials, born 1981-1996; Gen X, born 1965-1980; Baby Boomers, born 1946-1964; and Silent, born 1928-1945.”

These research results are “unweighted and statistically significant at a 95% confidence level within ±3 percentage points based on calculated error margin.”


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