Online merchants across all forms if ecommerce, including telemedia services, now view criminals and their own customers as presenting a comparable fraud risk and new study has found.
Ravelin’s Global Fraud Trends 2026 report estimates that fraud has cost the average ecommerce enterprise $11.4m (£8.4m) over the past year – an increase of 7.5% compared with 2025. The report is based on a survey of more than 1,500 merchants spanning Europe (UK), North and South America, and Australia.
Covering 10 countries, the report finds 66% of merchants have seen an increase in fraud. Some 15% of UK merchants report seeing “significant” increases in fraud, compared with just 7% of merchants in France and 10% in Germany.
The report reveals that merchants view first parties (customers) and third parties (criminals) as posing the same degree of risk for their business. Moreover, two thirds (64%) have experienced AI-enabled fraud or abuse in the past year.
Customer fraud rises in frequency and cost
Merchants experience the greatest losses from the criminal use of stolen payment cards. However, 43% of the merchants polled by Ravelin said that customer fraud has increased over the past year.
Merchants now rank chargeback fraud and refund abuse second and third for losses, behind payment fraud (see chart below). The actual extent of customer fraud may be far higher. Merchants agree it is difficult to detect, with six in 10 unable to confidently tell legitimate refund requests from fraudulent ones.
This chimes with data out from Juniper Research this week that finds that the value of transactions lost to friendly fraud – also known as first-party fraud – will reach nearly $16bn in 2031; a growth of 96% from its 2026 value of $8.1bn – because online payments cuts the emotional tie with merchants and reduces consumer qualms about asking for money back.
According to Juniper Research, friendly fraud’s growth is driven by an increase in consumers perceiving forms of fraud that target merchants as ‘victimless crimes’. This is taking many forms, including consumers using chargebacks after they have changed their mind about purchasing a service, or an attempt to gain goods for free.
Fraudsters outpace merchants in AI adoption
Ravelin’s study goes on to find that merchants may be lagging behind fraudsters’ embrace of new technologies, including AI. Three respondents in 10 say they do not use AI to defend against fraud. Overall, almost seven in 10 merchants (66%) agree they should be doing more to combat fraud.
AI-powered fraud attacks are impacting merchants’ bottom lines, too, the study finds. Two thirds of the merchants polled (66%) attribute at least 5% of their fraud losses to AI attacks. However, for one in five, AI fraud accounts for over 15% of losses.
Examples of AI fraud include card testing (also called enumeration attacks), falsified refund claims, deploying AI agents to commit fraud at scale, and targeted probes of merchants’ fraud-protection systems.
Martin Sweeney, CEO at Ravelin, comments: “The line between professional syndicates and abusive customers is blurring. At the same time, AI is turning up the heat, enabling criminals and consumers to automate and commit fraud at scale. This is a new phase of ecommerce fraud. As it evolves, merchants should ensure they understand, quantify and prevent the full range of threats.”
Dynamic fraud checks
The reputational impact of fraud divides the merchants polled. 64% report experiencing a drop in their share price following media coverage linking their brand to fraud. But reputational concerns also hold them back from tightening their controls. One in three (29%) cite their public image, and impacts on the customer experience, as obstacles to improving fraud detection.
Ravelin’s study finds that half of merchants polled (49%) prefer to tailor their fraud approaches dynamically to individual customers and transactions. Meanwhile, 43% prefer to block as many suspicious transactions as possible, even at the risk of affecting legitimate customers. Only 8% prefer to allow as many shoppers as possible, despite the increased fraud risk.
Sweeney concludes: “Our findings lay bare the shortcomings of traditional approaches to fraud detection in the face of changing fraud. Instead of focusing narrowly on payments, fraud teams need to understand customer behaviour more holistically. By taking into account disparate data like past purchases, returns, and customer lifetime value (CLV), AI-based tools can help merchants gain this holistic view.
“Such an approach can help merchants better manage their risks, by ensuring more good customers get the frictionless experience they deserve, while stopping bad actors.”
In practice, this dynamic approach to friction allows merchants to block criminals, give good customers uninterrupted shopping experiences, and allow those who fall in the grey areas to prove their legitimacy through additional checks. Ravelin’s solutions are designed to help merchants manage this complexity at scale, balancing fraud detection with a frictionless customer experience to unlock secure growth.
