E-Commerce Fraud Trends: Understanding the New Landscape for 2025

Table of Contents

1. Key Highlights:
2. Introduction
3. The Persistent Threat of Returns Fraud
4. Emerging Threats: Remote Access Attacks
5. Card Testing: A Growing Concern
6. Fraud in Quick-Service Restaurants (QSRs)
7. Loyalty Points Fraud: A Hidden Risk
8. The Rise of Fake Accounts
9. Regulatory Landscape: The Economic Crime and Corporate Transparency Act
10. The Growing Threat of Supply Chain Fraud
11. Cybersecurity Risks in Supply Chains
12. Conclusion: The Road Ahead for E-Commerce Fraud Prevention
13. FAQ

Key Highlights:

• The latest report from Forter and PwC identifies critical emerging fraud trends for e-commerce, with returns fraud remaining the most prevalent threat.
• New threats include remote access attacks, card testing, and a significant rise in fraud targeting quick-service restaurants (QSRs), alongside loyalty points fraud.
• The upcoming Economic Crime and Corporate Transparency Act in the UK will impose stricter regulations on organizations to prevent fraud.

Introduction

The e-commerce landscape is experiencing a dramatic evolution, with fraudsters becoming increasingly sophisticated in their tactics. As online shopping continues to surge, so do the risks associated with fraudulent activities. A recent report by Forter and PwC sheds light on the most pressing fraud trends for 2025, emphasizing the need for e-commerce businesses to adopt proactive measures to safeguard their operations and customers. With the stakes higher than ever, understanding these trends is crucial for retailers aiming to protect their bottom lines and reputations.

The Persistent Threat of Returns Fraud

Returns fraud has consistently topped the list of e-commerce fraud risks, and it shows no signs of abating. This type of fraud occurs when customers return items that they never purchased or return items that are not in the original condition. The cost of returns fraud can add up quickly, leading to significant losses for retailers. In 2024, returns fraud remains an alarming challenge, accounting for a considerable percentage of overall fraudulent activities within the sector.

Retailers are urged to implement stringent return policies and utilize advanced technologies to detect suspicious return patterns. Machine learning algorithms that analyze customer behavior and transaction histories can help identify potential fraud before it occurs.

Emerging Threats: Remote Access Attacks

One of the most concerning trends highlighted in the report is the rise of remote access attacks, which surged by 8% during the 2024 Black Friday and Cyber Monday shopping period compared to the previous year. In these attacks, unauthorized individuals gain access to a retailer's systems remotely, often exploiting vulnerabilities to steal sensitive information or execute fraudulent transactions.

To combat this threat, retailers must prioritize cybersecurity measures. This includes regular system audits, employee training on recognizing phishing attempts, and implementing multi-factor authentication to secure access to sensitive areas of their networks. As cyber threats evolve, so too must the defenses of e-commerce platforms.

Card Testing: A Growing Concern

Card testing, a method used by fraudsters to verify stolen credit card information, predominantly affects low-value transactions. This type of fraud is particularly prevalent in sectors such as crowdfunding, digital goods, and subscription services. Fraudsters often execute numerous small transactions to determine which cards are valid before making larger purchases.

Retailers can mitigate this risk by closely monitoring transaction patterns and implementing transaction limits for newly added payment methods. Anomaly detection systems that flag unusual purchasing behaviors can also serve as an effective line of defense.

Fraud in Quick-Service Restaurants (QSRs)

The report reveals a staggering 45% increase in fraud attacks targeting quick-service restaurants from 2023 to 2024. Over 85% of these fraud attempts involve returning fraudsters, highlighting the unique vulnerabilities within the QSR sector. The nature of these businesses, which often prioritize speed and convenience, can inadvertently create opportunities for fraud.

QSRs must enhance their fraud prevention strategies by integrating sophisticated verification processes and training staff to recognize potential fraud indicators. Robust loyalty programs can also be designed to deter fraudulent activities by implementing stricter verification for rewards redemption.

Loyalty Points Fraud: A Hidden Risk

Loyalty programs, while designed to reward customer loyalty, have become a fertile ground for fraud. Individuals exploit these programs by stealing points, manipulating transactions, or creating fake accounts to redeem rewards. Accounts associated with loyalty programs experience four to five times higher rates of attacks than standard accounts. Those with stored value or points face an even greater threat, with vulnerability rates soaring to six or seven times higher.

To combat loyalty points fraud, retailers should implement enhanced authentication measures, such as requiring additional verification for account changes or reward redemptions. Regular audits of loyalty program activities can help identify and address suspicious behavior before it escalates into significant losses.

The Rise of Fake Accounts

The creation and use of fake accounts remain a prevalent issue across various online platforms, from e-commerce to social media. Forter’s data indicates that approximately 90% of fake accounts on digital commerce platforms are generated by a small subset of disciplined fraud users. These accounts are often used to execute fraudulent transactions, making it imperative for businesses to implement strict account creation procedures.

To mitigate the risks associated with fake accounts, retailers can utilize identity verification technologies that require users to provide valid identification before account creation. Additionally, ongoing monitoring of account activity can help detect and eliminate fake accounts swiftly.

Regulatory Landscape: The Economic Crime and Corporate Transparency Act

As fraud risks escalate, regulatory bodies are stepping up to impose stricter compliance measures. The Economic Crime and Corporate Transparency Act of 2023, set to take effect on September 1, 2025, introduces significant legal implications for organizations that fail to prevent fraud. Under this legislation, companies can be held criminally liable if a fraud offense is committed by an associated person that benefits the organization.

E-commerce businesses must now prioritize developing clear policies and strategies to address fraud risks comprehensively. This includes establishing a culture of compliance within the organization and ensuring that fraud prevention measures are integrated into every aspect of the business.

The Growing Threat of Supply Chain Fraud

The report from Forter and PwC reiterates findings from PwC’s Global Economic Crime Survey 2024, which revealed that 42% of UK organizations had experienced supply chain fraud in the past two years. This type of fraud encompasses a wide range of activities, including procurement fraud, counterfeit goods, and logistics fraud.

Fraudulent activities within the supply chain can manifest in various forms, such as employees accepting kickbacks, falsifying shipping documents, and manipulating inventory records. Retailers must adopt a multi-faceted approach to combat supply chain fraud, which includes conducting thorough audits, establishing strong relationships with suppliers, and leveraging technology to enhance tracking and verification processes.

Cybersecurity Risks in Supply Chains

The increasing reliance on digital systems within supply chains has led to heightened cybersecurity risks. Data breaches, phishing attacks, and ransomware incidents can severely disrupt business operations and compromise sensitive information. Retailers must recognize that supply chain security is not just about physical goods; it also involves safeguarding digital assets and customer data.

To bolster cybersecurity measures, organizations should conduct regular vulnerability assessments, invest in employee training programs, and implement robust incident response plans. Collaboration with cybersecurity experts can also provide valuable insights into emerging threats and effective mitigation strategies.

Conclusion: The Road Ahead for E-Commerce Fraud Prevention

As e-commerce fraud continues to evolve, businesses must adopt a proactive and holistic approach to fraud prevention. Understanding the nuances of emerging threats, coupled with compliance with regulatory requirements, will be crucial for safeguarding operations and maintaining customer trust.

Retailers are encouraged to foster a culture of vigilance, where fraud prevention is integrated into daily operations rather than treated as an afterthought. Continuous assessment of fraud risks and strategies will empower e-commerce businesses to navigate the complexities of the digital marketplace and protect their interests in an increasingly challenging environment.

FAQ

What can e-commerce businesses do to prevent returns fraud?
Implementing stringent return policies, utilizing advanced transaction monitoring systems, and training staff to recognize suspicious return patterns can help mitigate returns fraud.

How can retailers combat remote access attacks?
Prioritizing cybersecurity measures such as system audits, staff training on phishing recognition, and multi-factor authentication can significantly reduce the risk of remote access attacks.

What strategies can be employed to prevent loyalty points fraud?
Retailers can enhance authentication measures for loyalty program accounts, conduct regular audits of loyalty activities, and implement stricter verification processes for rewards redemption.

Why are fake accounts a concern for e-commerce platforms?
Fake accounts are often used to execute fraudulent transactions, leading to significant financial losses for retailers. Implementing strict account creation procedures and ongoing monitoring can help mitigate this risk.

What does the Economic Crime and Corporate Transparency Act entail?
The Act imposes legal obligations on organizations to prevent fraud, holding them criminally liable if a fraud offense is committed by an associated person that benefits the organization.