The COVID-19 outbreak saw a surge in e-commerce, but it also exposed a darker side. In 2020, over 38 percent of all scams worldwide were attributed to online purchases. However, as the pandemic waned, incidents of online shopping scams decreased, accounting for three in ten e-commerce transactions between January and June 2022. In 2023, the figure increased again to 41.9 percent. Rising costs and prevention efforts As online fraud continues to escalate, so do the financial losses and prevention efforts. E-commerce losses to online payment fraud were estimated at 41 billion U.S. dollars globally in 2022, with projections reaching 48 billion U.S. dollars by 2023. In response, the e-commerce fraud detection and prevention market is expected to grow significantly, potentially surpassing 100 billion U.S. dollars by 2027. [1273177, 1273278] AI in fraud management Merchants are adapting their strategies to combat the rising tide of online fraud. In 2024, 45 percent of e-merchants prioritized preventing fraud and chargebacks in their fraud management strategy, up from 40 percent in 2021. Additionally, approximately two-thirds of online merchants reported using or planning to use generative AI in e-commerce fraud management within the next 12 months to safeguard online transactions.

In 2023, the number of people reporting a monetary loss due to online purchase scams jumped to 82.6. A year prior, the figure stood at 74 percent. The so called susceptibility rate did not go over 71.2 percent in 2015.

Fraudulent transactions to online shopping scammers are on the rise worldwide. In 2021, the median monetary loss per online purchase scam reached 101 U.S. dollars, up from 96 dollars the previous year. According to a worldwide study, victims of online shopping scams lost money more easily than in the past. Indeed, the percentage of consumers who lost money after being targeted by online purchase scams went from 71 percent in 2015 to almost 75 percent in 2021.

Protect shoppers at all costs The bigger is the threat, the bigger is the required defense. In 2020, the size of the e-commerce fraud detection and prevention market was over 28 billion U.S. dollars, while it is expected to grow to over 69 billion U.S. dollars by 2025. If the size of such prevention measures might appear excessive, think again. In 2021, e-commerce losses to online payment fraud were expected to reach 20 billion U.S. dollars globally, marking a 14 percent increase from the previous year.

The importance of safe purchases Ensuring safe purchases to online consumers is an essential aspect of the shopping experience. According to a survey, more than eight in ten consumers in Mexico and the United States would opt for online shopping more often if vendors guaranteed safe transactions. A slightly lower percentage of Canadian and Australian consumers valued cybersecurity in online shopping, too.

Over 20 thousand instances of online shopping scams were reported in Australia in 2021. The reported cases of online shopping scams have been on the rise since 2015.

Online shopping scams  

Online shopping scams in Australia are fraudulent activities carried out through the internet with the intent of tricking consumers into paying for non-existent or substandard goods or services, or items that are never delivered. These frauds can take many forms, including fake websites, phishing emails, social media ads, and online marketplaces. According to Scamwatch, a program run by the Australian Competition and Consumer Commission (ACCC), around 20 thousand online retail frauds were reported by Australians in 2021, resulting in losses of more than $8 million Australian dollars.

Online shopping behavior in Australia  

Like the rest of the world, Australia has seen a significant increase in online retail sales since the COVID-19 pandemic. In a survey on the activities performed online by internet users conducted in June 2022, 87 percent of respondents stated that they used the internet for online shopping. Another survey conducted in the same month showed that the largest number of purchases were made in the homeware and appliances category, making 22.7 percent of total online expenditure in Australia. This was followed by the department stores segment with 16.8 percent of online spending.

As of September 2022, around 6.61 million Australian dollars had been lost in online shopping scams in Australia. In 2021, over eight million Australian dollars had been reported as being lost through online shopping scams.

In 2022, websites were reported as the primary means of contact for online shopping scams globally, with 37 percent of people who lost money to such scams citing them. Social media was the second most common method scammers used to target e-commerce buyers, followed by emails.

This statistic illustrates the financial losses caused by internet shopping scams in Hong Kong from 2016 to 2022. In 2022, online shopping scams in Hong Kong bilked people out of approximately 74.1 million Hong Kong dollars.

According to a global study conducted in 2022, individuals between the ages of 35 and 44 reported the highest susceptibility to online purchase scams, with more than 77 percent of victims losing money. However, the survey also found that individuals aged 55 and above were less likely to be scammed, with less than three-quarters reporting a financial loss.

This statistic illustrates the number of internet shopping scam cases handled by the Hong Kong police from 2016 to 2022. In 2022, police in Hong Kong handled around 8,735 online shopping scam cases, a significant increase compared to the previous year.

According to a 2022 survey, men were slightly more vulnerable to online shopping scams than women. The percentage of men who reported losing money to e-commerce scams was 72.7 percent, compared to 72.4 percent among women.

As of June 2023, around 38 percent of respondents in China had encountered prize or lottery-winning scams online. Other major cybersecurity issues included online shopping scams, online part-time job scams, and phishing websites.

According to the 2019 survey, 11 percent of Finns were very concerned about being a victim of online shopping fraud. 31 percent of respondents in Finland stated that they were fairly concerned, while 36 percent did not worry so much about the possibility of online shopping fraud.

This statistic displays the findings of a survey on the frequency of experiences of online shopping fraud in the European Union (EU) as of 2019. During the survey period, it was found that 12 percent of respondents experienced this type of fraud at least once.

In the first half of 2020, there were 62,868 consumer frauds reported in the United Kingdom (UK), of which around 41 thousand were related to online shopping and auction fraud. According to research released in October 2021, online shopping and auction frauds increased by 37 percent between the first half of 2019 and first half of 2020.

According to estimates, e-commerce losses to online payment fraud were estimated at 41 billion U.S. dollars globally in 2022, up from the previous year. The figure is expected to grow further to 48 billion U.S. dollars by 2023.

Rise in e-commerce fraud Movement restrictions introduced across the globe to counter the COVID-19 pandemic led to an unprecedented increase in e-commerce, opening a window for opportunistic fraudsters. The impact of the pandemic on e-commerce fraud attempts has been felt globally. In 2021, three-quarters of online merchants reported a net increase in these attacks compared to before the sanitary crisis. This phenomenon, however, has affected each region differently, with the share of e-commerce revenue lost to fraud being higher in Asia-Pacific and Latin America that year.

Not so friendly fraud The most common type of e-commerce fraud attack is known as friendly fraud. Friendly fraud occurs when a customer knowingly completes a purchase with their debit or credit card and then proceeds to dispute that purchase with their bank for a refund. In 2021, nearly 40 percent of online merchants worldwide reported having experienced this type of attack. While North America recorded a lower share of accepted orders resulting in friendly fraud than other regions of the world, this method accounted for nearly 30 percent of fraud losses experienced by online merchants in the U.S. alone.

According to a survey on personal finance conducted during the fourth quarter of 2024 in the Philippines, 45 percent of respondents who had experienced digital fraud attempts were targeted with phishing attacks. In addition, 41 percent of respondents were targeted with smishing or phishing using text messages.

As of September 2023, there were more than 8,800 repoted e-commerce scams in Malaysia. The number scams experienced by consumers of e-commerce platforms in the country slightly decreased by around 200 reported cases from 2021 to 2022.

One percent of Swedes who responded to a survey, conducted in 2019, reported to have experienced online shopping fraud more than three times over the past three months that year. In contrast, 85 percent of the respondents had never been victims to online shopping fraud.

Debit cards, credit cards, and PayPal were the payment methods e-commerce merchants worldwide saw the most fraud. In contrast, less than a quarter of online merchants cited digital wallet services, Apple Pay and Google Pay, as the most fraudulent.

In the first half of 2023, the largest share of scams performed on social media, 44 percent, were online shopping fraud incidents. Investment-related scams ranked second, accounting for 20 percent of the total, followed by romance scams, with six percent of reported social media scams.