One in Three Consumers Victimized by Fraud on Gig Economy Platforms

Rhea-AI Summary

TransUnion's recent report reveals that over one-third of American consumers have faced fraud on gig economy platforms, marking a 21% increase since July 2023. Interestingly, while less than half of the respondents were concerned about fraud, 75% indicated they would abandon a platform if compromised. The study also highlights that Millennials are most frequently targeted, comprising 32% of single-time victims and 40% of repeated victims. Fraud types primarily include identity theft and payment fraud. Moreover, consumers expect gig platforms to enhance security measures, including biometric verification, to protect their data. The report also notes a decline in consumer spending on gig services, urging platforms to improve operational efficiencies for competitive pricing.

Positive

• TransUnion reports a 21% increase in fraud cases among gig economy users since July 2023.
• 75% of consumers would switch platforms if their accounts were compromised.
• Millennials, who are power users, are more frequently targeted for fraud.
• Consumers favor biometric verification for better security on gig platforms.
• Gig platforms advised to leverage identity data to improve worker onboarding and marketing efficiency.

Negative

• More than one-third of American consumers have been victimized by fraud on gig economy platforms.
• Millennials, with higher incomes, report higher incidences of fraud.
• Consumers report decreased spending on gig services, with 74% spending less than $250 per month.

TransUnion report finds 75% of consumers would switch services in the event of fraud

CHICAGO, May 14, 2024 (GLOBE NEWSWIRE) -- 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. The full findings are available in the 2024 Semi-Annual U.S. Gig Economy Report.

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.

“Millennials are among the power users for gig platforms, so it’s not surprising that they would encounter fraud at higher levels,” said Tracey Lazos, senior director of TransUnion’s gig economy business. “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.”

Generational Breakdown of Consumers Victimized by Fraud

	Gen Z		Millennials		Gen X		Baby Boomers
Victimized Once	22%		32%		20%		26%
Victimized Multiple Times	18%		40%		26%		16%

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.

Consumers do not feel responsible for security

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.

“What this tells us is that consumers place the onus for security squarely on the platforms,” said Lazos. “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.

Consumers getting cost conscious

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.

“Leveraging identity data to speed up worker onboarding and improve marketing efficiency to find the next crop of big spenders can help gig platforms achieve profitable growth,” concluded Lazos.

Click here to read the 2024 Semi-Annual Consumer Gig Economy Report.

Learn more about TransUnion’s TruAudience marketing solutions suite.

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. Please note some chart percentages may not add up to 100% due to rounding or multiple answers being accepted.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good^® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business

Contact	Dave Blumberg
	TransUnion
E-mail	david.blumberg@transunion.com
Telephone	312-972-6646

FAQ

What percentage of consumers have experienced fraud on gig economy platforms according to the TransUnion report?

More than one-third of American consumers have faced fraud on gig economy platforms.

How has the fraud rate changed on gig economy platforms since July 2023?

The fraud rate on gig economy platforms has increased by 21% since July 2023.

What measures do consumers expect from gig platforms for enhanced security?

Consumers expect gig platforms to implement biometric verification and other stringent security protocols.

What percentage of Millennials have been victimized by fraud on gig platforms?

32% of Millennials have been victimized once, and 40% have been victimized multiple times.

How has consumer spending on gig platforms changed according to the report?

74% of consumers now spend less than $250 per month on gig services, down from 64% in July 2023.