Driven by AI, Customers Now Rival Criminals in Ecommerce Fraud, Report Finds

Ecommerce fraud is on the rise, fueled by an increase in customer abuse and the swift adoption of artificial intelligence (AI). This alarming trend is highlighted in the latest research from Ravelin, a platform specializing in ecommerce fraud prevention.

According to Ravelin’s Global Fraud Trends 2026 report, the average ecommerce business has incurred losses of approximately $11.4 million (£8.4 million) over the past year, marking a 7.5% increase from 2025. The report is based on a survey of over 1,500 merchants across Europe, North and South America, and Australia.

Surge in Fraud Incidents

The report reveals that 66% of merchants have reported an uptick in fraudulent activities. In the UK, 15% of merchants noted “significant” increases in fraud, compared to 7% in France and 10% in Germany. This indicates a growing concern among businesses regarding the evolving landscape of ecommerce fraud.

Merchants are increasingly viewing both first-party (customers) and third-party (criminals) threats as equally risky. Notably, 64% of respondents indicated they have encountered AI-enabled fraud or abuse within the last year.

Rising Costs of Customer Fraud

The most substantial losses for merchants stem from the criminal use of stolen payment cards. However, 43% of merchants surveyed reported an increase in customer fraud over the past year. Chargeback fraud and refund abuse are now ranked as the second and third most significant sources of loss, following payment fraud. The actual scale of customer fraud may be even higher, as 60% of merchants struggle to distinguish between legitimate refund requests and fraudulent ones.

Technology Gap in Fraud Prevention

Ravelin’s findings suggest that merchants may be falling behind in the adoption of new technologies to combat fraud. Approximately 30% of respondents do not utilize AI in their fraud prevention strategies. Furthermore, 66% of merchants acknowledged that they should enhance their efforts to tackle fraud.

AI-driven fraud attacks are also impacting the financial performance of businesses. Two-thirds of the merchants surveyed attribute at least 5% of their fraud losses to AI-related attacks, with 20% reporting that AI fraud constitutes over 15% of their losses. Common forms of AI fraud include card testing, falsified refund claims, and the deployment of AI agents to exploit vulnerabilities in fraud protection systems.

Martin Sweeney, CEO of Ravelin, emphasized the blurring lines between professional fraud syndicates and abusive customers. He noted that AI is intensifying these challenges, enabling both criminals and consumers to automate fraudulent activities on a larger scale. He urged merchants to fully understand and mitigate the diverse threats posed by this evolving fraud landscape.

Balancing Fraud Prevention and Customer Experience

The reputational impact of fraud is a significant concern for merchants. Approximately 64% reported a decline in their share price following media coverage linking their brand to fraudulent activities. However, concerns about public image and customer experience often hinder efforts to tighten fraud controls. About 29% of merchants cited these factors as obstacles to improving fraud detection.

Ravelin’s study indicates that nearly half of the merchants (49%) prefer to customize their fraud prevention strategies based on individual customer behavior and transaction specifics. In contrast, 43% opt to block as many suspicious transactions as possible, even if it risks affecting legitimate customers. Only 8% favor allowing as many shoppers as possible, despite the heightened risk of fraud.

Sweeney pointed out that traditional approaches to fraud detection are inadequate in light of the evolving nature of fraud. He advocated for a more holistic understanding of customer behavior, incorporating data such as past purchases, returns, and customer lifetime value (CLV). This approach can help merchants manage risks more effectively, ensuring that genuine customers enjoy a seamless shopping experience while preventing fraudulent activities.

Conclusion

Ravelin’s findings underscore the importance of adapting fraud prevention strategies to meet the challenges posed by increasingly sophisticated fraud tactics. The report highlights the need for merchants to balance effective fraud detection with a positive customer experience, enabling them to navigate the complexities of ecommerce fraud successfully.

Ravelin has been publishing the Global Fraud Trends report annually since 2020. For further insights, access the full report here.

Research Methodology

In January 2026, Ravelin commissioned Qualtrics to conduct an online survey of 1,504 fraud and payments professionals globally, focusing on the UK, USA, Canada, France, Germany, Italy, Spain, Australia, Brazil, and Mexico. Participants were from the C-suite or fraud/risk, finance/payments, compliance/operations, or product teams of enterprises in sectors such as retail, travel, digital goods, and marketplaces. All participants worked for companies with over $50 million in annual revenue and/or more than 450 employees.

About Ravelin

Ravelin is an AI-native fraud prevention company that provides technology and support to over 340 online businesses to combat evolving fraud threats and facilitate secure payment acceptance. By leveraging machine learning, graph networks, behavioral analysis, consortium data, and expert rules, Ravelin empowers businesses to gain deeper insights into their data for effective fraud detection and increased payment acceptance.

Published on 2026-06-26 16:09:00 • By the Editorial Desk

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