eCommerce fraud protection: Detection and prevention in 2025

Introduction: The growing threat of e-commerce fraud

In recent years, online shopping has become a vital part of global retail, transforming how consumers and businesses interact. What once took place in physical stores now happens across digital storefronts, accessible 24/7. The convenience, speed, and variety offered by online retail have redefined the customer experience—from groceries to electronics to digital goods.

With over five billion internet users worldwide, the number of online shoppers continues to rise. This growth is driven by better internet access, advances in mobile tech, smarter payment gateways, and personalized shopping powered by data. In 2024, retail e-commerce sales surpassed $4.1 trillion globally, and the trend shows no signs of slowing. With innovations like same-day delivery, AR-powered shopping, and secure payment options, e-commerce is evolving to be more dynamic and customer-focused than ever.However, this surge has also paved the way for increasingly sophisticated fraudulent activities.

“Ecommerce was the number one industry to suffer at the hands of authorized fraud scams, and by a considerable margin: more than 18 times the global average.”

Ira Bondar Fraud Platform Lead Veriff

In the latest Veriff E-commerce Report, we’ve combined data from our Identity Fraud Report, Fraud Index, and Fraud Industry Pulse Survey to uncover the most pressing fraud trends affecting e-commerce and online marketplaces. Here’s what you need to know—and how your business can stay ahead.

Key takeaways: The state of e-commerce fraud in 2025

• Fraud is rising fast: A 21% increase in fraud year-on-year.
  
• 1 in 20 verification attempts in 2024 were fraudulent.
  
• Authorized fraud in e-commerce surged to 1.62%, 18x higher than the global average.
  
• AI-driven attacks are increasing, with 60.5% of surveyed professionals reporting more AI use in scams.
  
• Consumer expectations are shifting: Over 75% of consumers demand ID verification when signing up for online marketplaces.
  
• IDV and biometrics adoption is widespread: 83% of organizations already use it; 81% plan to expand use.

The rise of silent & sophisticated fraud

Fraud is no longer just a risk—it’s evolved into a calculated business model for criminal enterprises targeting the online retail economy. One of the most alarming trends is the surge in impersonation scams aimed at e-commerce shoppers, which exploit trust and urgency to trick victims into costly mistakes. New analysis from the Federal Trade Commission shows a more than four-fold increase since 2020 in reports from older adults who lost $10,000 or more—sometimes their life savings—to scammers impersonating government agencies or businesses to trick them into transferring money, only to steal it.

According to Federal Trade Commission data, many of these schemes rely on high-pressure narratives—claims of account breaches by well-known brands (like Amazon), criminal activity linked to personal information, or fake security alerts (like from Microsoft or Apple)—designed to coerce victims into “transferring money to keep it safe. In reality, the funds go straight into the scammers’ pockets.

As Andrea Rozenberg, Veriff’s General Manager in Brazil, explains:

“Fraudsters also innovate—and quickly. Today, it’s not enough to know who’s joining your platform. It’s essential to closely monitor who’s already there.”

With fraud-as-a-service thriving on platforms like Telegram and WhatsApp, traditional prevention measures are no longer enough. Businesses must adopt continuous verification and risk-based models—dynamic defenses that activate the moment suspicious activity appears.

Common e-commerce fraud types:

• Account Takeover (ATO): Stolen credentials grant full access to accounts.
  
• Authorized Fraud: Scammers trick victims into verifying identities on their behalf.
  
• Refund/Chargeback Abuse: Consumers falsely claim issues to reverse payments.
  
• Synthetic Identity Fraud: Fake profiles built using stolen or fabricated data.
  
• Return & Transaction Fraud: Exploiting return policies or using stolen cards.
  
  
  

How Veriff helps prevent e-commerce fraud

AI-powered fraud prevention solutions

• Biometric Authentication – Enhances security with facial recognition, adding an additional layer to multi-factor authentication (MFA).
• Promotion abuse prevention – Detects users attempting to create multiple accounts for fraudulent promotions.
• Fraud detection algorithms – Uses machine learning to detect and prevent fraudulent transactions before they occur.
• Enhanced user experience – Minimizes false positives, ensuring a smooth onboarding process while maintaining security.
• Comprehensive data analysis – Examines IP addresses and device data to flag suspicious activities.

By leveraging Veriff’s AI-driven fraud prevention solutions, e-commerce businesses can safeguard transactions, protect customer trust, and ensure global regulatory compliance.

Case Study: A1 SolarStore

As A1SolarStore aggressively scaled across the U.S., Caribbean, and European markets, its business—characterized by fully digital, high‑transaction purchases of solar equipment—became an appealing target for organized fraud schemes like chargeback and shipping misdirection. Internal rules-based approaches, such as blocking multiple orders to a single address, proved overly restrictive and degraded legitimate customer experience. By integrating Veriff’s identity verification solution—painlessly deployed via a self‑service trial—A1 SolarStore eliminated all chargeback fraud incidents, achieving a 100 % fraud prevention rate. Verified customers now enjoy friction‑free ordering, boosting both trust and efficiency in what had become a digital battleground.

Actionable insights: Protecting your e-commerce business

Practical strategies for fraud prevention

• Identifying red flags – Monitor for suspicious transaction patterns and unusual behavioral anomalies.
• Strengthening security – Implement advanced fraud detection solutions like real-time verification, biometric authentication, and device fingerprinting.
• Employee training – Educate staff on recognizing and mitigating fraud attempts.

Regulatory compliance best practices

• Adhering to global frameworks – Ensure compliance with relevant applicable regulations.
• Secure data handling – Maintain robust data protection measures to safeguard customer information.
• Leveraging Identity Verification solutions – Use AI-driven verification to prevent non-compliant transactions and fraudulent activities.

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Regional fraud trends & compliance: US vs UK

🇺🇸 US market

Fraud challenges: As online shopping continues to grow, the US market faces an increase in fraud-related issues. Refund fraud, where customers falsely claim refunds for items they never returned, is becoming more prevalent. Account takeover (ATO) fraud, where fraudsters gain unauthorized access to user accounts, poses additional risks by exploiting personal data. Instant payment fraud, fueled by the rise of digital wallets and peer-to-peer payment systems, remains a significant challenge.

Key regulations: To address these issues, the US financial market operates under several key regulations, including the Bank Secrecy Act (BSA), which focuses on preventing money laundering, tax matters are handled by IRS guiding the compliance for financial reporting and transparency, and FinCEN AML rules aimed at combating fraud and other financial crimes.

🇬🇧 UK market

Fraud challenges: The UK market faces its own set of fraud-related challenges. VAT refund fraud, where individuals or businesses falsely claim VAT refunds, continues to be a concern. Phishing scams targeting individuals through deceptive emails and messages are on the rise, often leading to data theft. Additionally, data breaches pose a serious threat to both businesses and consumers, as stolen information can be used for fraudulent activities.

Key regulations: The UK has implemented several important regulations to mitigate these risks. The UK GDPR strives to ensure that all businesses handling personal data adhere to strict data protection standards, safeguarding personal and financial information. The Financial Conduct Authority (FCA) guidelines emphasize transparency and fair practices for the financial services sector. 

🇧🇷 Brazil market

Fraud challenges: Brazil has experienced a surge in phishing attacks and social engineering scams, especially through messaging apps like WhatsApp. Fraudsters often impersonate trusted individuals to extract sensitive information. Pix-related fraud—exploiting Brazil’s instant payment system—has also become a major issue, as criminals coerce or deceive users into transferring funds. Synthetic identity fraud is rising, particularly affecting financial institutions and digital onboarding processes.

Key regulations: To counter these threats, Brazil has enacted the Lei Geral de Proteção de Dados (LGPD), its equivalent of the GDPR, which sets strict rules around data privacy and consent. The Central Bank of Brazil oversees financial system regulations, including those governing Pix. Additionally, COAF (Council for Financial Activities Control) plays a vital role in enforcing anti-money laundering (AML) protocols and monitoring suspicious transactions.

Looking ahead: Veriff’s vision for secure e-commerce

Veriff helps answer all three with its multi-layered Fraud Protect system:

• DocCheck: Validates document authenticity
• FaceCheck & FaceBlock: Biometric analysis and manipulation detection.
• DeviceCheck: Detects suspicious device signals.
• CrossLinks & RiskScore: Uncovers fraud patterns across networks.
• FaceCheck Liveness: Ensures real-time presence of users.

Final thoughts: Fighting fraud while fueling growth

Fraud isn’t just a technical challenge—it’s a strategic priority. Businesses that treat digital trust as a core value will win the loyalty of modern consumers.

As Andrea Rozenberg aptly concludes:

“A good security system isn’t there to make life difficult. It’s there to help the business grow—safely, fairly, and efficiently.”

Frequently Asked Questions (FAQs)

1. What are the biggest e-commerce fraud risks in 2025?
Synthetic identities, phishing scams, account takeovers, and instant payment fraud.

2. How can businesses prevent fraud without adding friction?
Use risk-based models and biometric IDV for seamless, secure user journeys.

3. How does Veriff help stop fraud?
By combining biometrics, AI, and behavioral analysis to detect threats in real time.

4. What regulations must e-commerce businesses follow?
Regulations vary by region, including GDPR (EU/UK), LGPD (Brazil), and AML/KYC frameworks globally.