As we navigate through 2025, high-risk merchants face a rapidly evolving fraud landscape. From AI-driven scams to rising chargeback rates, the challenges are growing more complex and costly. In 2024 alone, businesses lost $8.9 billion to chargebacks, a figure projected to rise as fraud tactics become more sophisticated.

For e-commerce merchants, SaaS companies, crypto exchanges, and other high-risk industries, staying ahead of these fraud trends is crucial to protect revenue and maintain customer trust. In this article, we explore the top 5 fraud trends impacting high-risk merchants in 2025 and how innovative solutions like avoided.io can safeguard your business with real-time chargeback prevention and fraud management.

1. AI-Driven Fraud and Deepfakes

Fraudsters are increasingly leveraging Artificial Intelligence (AI) to conduct highly convincing scams. From AI-generated phishing emails to deepfake videos and voice impersonations, these sophisticated attacks are designed to deceive even the most cautious businesses and consumers. AI is also used to create synthetic identities that combine real and fake information, enabling fraudsters to bypass traditional identity verification systems.

Impact on High-Risk Merchants:

• Crypto Exchanges and Digital Goods: AI-powered bots are being used to create fake accounts and initiate fraudulent transactions, leading to unauthorized chargebacks.
• E-commerce and Subscription Services: Deepfake videos and social engineering attacks are tricking customer support teams into issuing refunds and approving chargebacks.

What can help merchants:

• Near Real-Time Fraud Detection: By leveraging combined alerts from Ethoca and Verifi, avoided.io detects fraudulent activities before they escalate into chargebacks, but only for purchases made using credit or debit cards.
• Customizable Prevention Rules: Merchants can tailor fraud detection settings to identify and block suspicious card-based transactions, minimizing the impact of AI-driven fraud.
• No-Code Integration: Quick and seamless deployment ensures businesses can respond to emerging AI fraud tactics without technical complexity.

2. Surge in Friendly Fraud

Friendly fraud occurs when customers dispute legitimate transactions, often claiming they did not receive a product or did not authorize the purchase. This type of fraud is particularly challenging for high-risk merchants, as it’s difficult to prove intent. In 2025, friendly fraud is expected to increase as consumers become more familiar with chargeback processes and as subscription-based models gain popularity.

Impact on High-Risk Merchants:

• E-commerce Retailers: High return rates and disputes over digital goods (e.g., software, e-books) are leading to revenue losses and increased chargeback ratios.
• SaaS Companies and Subscription Services: Recurring payment disputes are causing revenue leakage and damaging customer relationships.

What can help merchants:

• Automated Chargeback Management: avoided.io automates dispute responses with customizable workflows, reducing manual intervention and operational costs for credit and debit card transactions.
• Comprehensive Reporting & Analytics: Merchants gain insights into chargeback patterns, enabling them to develop targeted strategies to reduce friendly fraud.
• Multi-Card Network Support: Seamless integration with Visa, Mastercard, American Express, JCB, and Discover ensures broader fraud coverage and faster resolution times for card-based disputes.

3. Subscription Renewal Scams

Subscription renewal scams are on the rise, particularly affecting SaaS companies and digital content providers. Fraudsters manipulate recurring payments and initiate chargebacks by falsely claiming unauthorized renewals or by exploiting trial periods. This trend is fueled by the growing popularity of subscription services, making it easier for scammers to dispute recurring charges.

Impact on High-Risk Merchants:

• SaaS and Digital Content Providers: Increased disputes over recurring payments are leading to revenue losses and higher chargeback ratios.
• E-commerce Merchants: Subscription-based products and services are facing higher risks of fraud-related disputes and refunds.

What can help merchants:

• Real-Time Alerts: Near-instant notifications from Ethoca and Verifi enable merchants to detect fraudulent subscription transactions before they escalate into chargebacks, specifically for credit and debit card payments.
• Customizable Prevention Rules: Merchants can set specific rules to monitor subscription renewals and prevent chargebacks from unauthorized disputes.
• Comprehensive Reporting & Analytics: Data-driven insights help businesses identify fraudulent patterns in recurring payments, enabling proactive fraud prevention.

4. Cross-Border Fraud in E-commerce

With the continued growth of global e-commerce, cross-border fraud is becoming more prevalent. Fraudsters exploit differences in regulations, currency conversions, and security standards between countries to perpetrate scams. This is particularly challenging for high-risk merchants dealing with international transactions, as they face increased risks of unauthorized chargebacks and currency-related disputes.

Impact on High-Risk Merchants:

• Fashion, Electronics, and Luxury Goods: High-value international transactions are prime targets for fraudsters, leading to costly chargebacks and reputational damage.
• Digital Goods and Subscription Services: Cross-border fraud is impacting businesses selling digital products, with disputes over unauthorized purchases and currency discrepancies.

What can help merchants:

• Multi-Card Network Support: avoided.io integrates seamlessly with Visa, Mastercard, Amex, JCB, and Discover, ensuring holistic fraud prevention for international transactions made via credit or debit cards.
• Combined Ethoca and Verifi Solution: Dual integration provides broader coverage and faster resolution times for cross-border disputes.
• Advanced Data Analysis: Real-time dashboards and trend analysis empower merchants to detect and mitigate cross-border fraud patterns.

5. Crypto and Blockchain Scams

The rapid growth of cryptocurrency adoption and blockchain technology has given rise to new fraud schemes, including crypto wallet hacks and NFT scams.

Impact on High-Risk Merchants:

• Crypto Exchanges and Wallet Providers: Increased chargebacks due to unauthorized purchases made with credit or debit cards linked to crypto wallets.
• NFT Marketplaces: Rising cases of counterfeit NFTs and phishing scams, leading to disputes, particularly when buyers use credit or debit cards.

What can help merchants:

• Real-Time Alerts: Near-instant notifications from Ethoca and Verifi enable merchants to detect fraudulent subscription transactions before they escalate into chargebacks, specifically for credit and debit card payments.
• Customizable Prevention Rules: Merchants can set specific rules to monitor subscription renewals and prevent chargebacks from unauthorized disputes.
• Comprehensive Reporting & Analytics: Data-driven insights help businesses identify fraudulent patterns in recurring payments, enabling proactive fraud prevention.