While online fraud for companies has long been synonymous with payment fraud and account takeovers, a new wave of threats is gaining ground led by first-party chargeback fraud, refund abuse, and, increasingly, AI-powered attacks.  

Nearly half of merchants (47%) now report a rise in fraud perpetrated by known customers.

These are the findings of Ravelin’s annual Global Fraud Survey 2025, which paints a picture of escalating fraud.

Fraudulent chargeback requests filed by cardholders who are misrepresenting the truth in order to gain money or items for free have now become the second most costly type of fraud, just behind online payment fraud, which uses stolen or cloned cards and is generally perpetrated by criminals.

The Ravelin survey also reveals artificial intelligence is now an established fraud tool. Almost two-thirds (65%) of merchants believe they have already been targeted by AI-enabled fraud, which can include criminals leveraging synthetic identities,  and AI-generated phishing attempts.

Concern is widespread: 92% say they are worried about AI being used to defraud their business, with nearly half saying they are “very concerned”.

However, the level of concern and activity has not markedly changed since last year, suggesting that while AI-facilitated fraud is serious, it is not escalating at the same pace as other types of fraud (see chart below).

Ravelin CEO Martin Sweeney said: “Today, merchants are navigating a more nuanced threat landscape. 

“However, this complexity does not mean merchants are powerless. In fact, companies already have the first thing they need to take action: their own data. By better understanding the individuals behind each transaction – what constitutes normal behaviour for them, and what does not – they can respond more confidently with much more precision. 

“This also enables them to deliver a great shopping experience to legitimate customers without obstacles and friction. Fraudsters will be blocked, but those who fall in between, including opportunists and casual abusers, can be rehabilitated back into good customers.

“The key is not to treat everyone the same. With the help of artificial intelligence, machine learning and automation, merchants can use data effectively to make smarter and fairer decisions.”

The report reveals that marketplaces as a sector have been hit the hardest, with 69% reporting a significant rise in fraud volume. Travel and retail are not far behind, while digital goods companies also face intensifying threats, particularly from account takeovers and refund abuse. 

Regionally, Canada (28%) and the USA (18%) reported the most severe increases in fraud, followed closely by Brazil and Mexico. UK merchants are also feeling the pressure, with 14% reporting a significant rise in fraud.