Australians Lose $1,700 Each to AI-Powered Fraud in 2025
▼ Summary
– Consumer-reported fraud losses nearly doubled year-on-year in 2025, with Australians losing approximately $1,700 per person on average.
– Baby boomers were the most affected demographic, experiencing a 332% increase in fraud losses compared to the previous year.
– Over a quarter of Australian retailers reported losses exceeding $1.3 million, and 31% expect more fraud attempts during peak shopping seasons.
– AI is enabling more sophisticated and widespread fraud, with scams now appearing polished and at an industrial scale, requiring advanced prevention tools.
– AI-powered fraud prevention platforms can balance security and customer experience by detecting scams in real-time without adding friction to checkout.
A concerning new study reveals that Australians are facing a dramatic surge in financial losses due to sophisticated fraud, with the average person losing close to $1,700 per person to fraud in 2025. This figure represents a near doubling of losses compared to the previous year, signaling a rapidly escalating threat. The data, compiled in a comprehensive retail report, indicates that no demographic is immune, though baby boomers have been disproportionately affected, suffering a staggering 332 percent increase in their financial losses.
The financial damage extends beyond individual consumers to the businesses that serve them. Over a quarter of Australian retailers reported fraud-related losses surpassing $1.3 million in the last twelve months. The problem intensifies during busy shopping periods, with nearly one in three retailers noting a significant uptick in fraud attempts when consumer activity is at its peak. This creates a difficult balancing act for businesses, which must capitalize on seasonal revenue opportunities while simultaneously defending against a rising tide of sophisticated scams.
Hayley Fisher, Country Manager for Australia and New Zealand at Adyen, commented on the evolving nature of the threat. She explained that as shoppers hunt for deals and companies work to meet heightened demand, fraudulent schemes are accelerating. These scams are now more challenging to identify and appear increasingly legitimate to the average person. Fisher stressed the urgency for businesses to proactively invest in advanced protective systems to safeguard their revenue and, crucially, to maintain the trust of their customers.
A key driver behind this new wave of fraud is the adoption of artificial intelligence by criminals. AI is transforming retail and reshaping how Australians shop, but it’s also changing how fraudsters operate. Deceptive messages crafted by AI, such as phishing texts or emails, no longer contain the obvious spelling and grammatical errors that once made them easy to spot. Instead, they mimic professional, brand-approved marketing materials and can be distributed on an industrial scale. As these AI-generated scams become more polished and widespread, retailers feel mounting pressure to upgrade their defensive strategies.
Addressing modern fraud requires a delicate equilibrium between robust security and a frictionless shopping journey. This balance becomes especially fragile during high-volume sales seasons. Outdated fraud controls often irritate legitimate customers with cumbersome verification steps, leading to abandoned shopping carts and lost sales. However, new AI-powered platforms are enabling a fight-fire-with-fire approach. These systems can analyze transactions in real time, stopping complex fraudulent attempts without introducing checkout delays, allowing genuine customers to complete their purchases smoothly.
Fisher added that historically, enhancing security often meant compromising on the customer experience. Today, AI-driven tools empower retailers to confront highly sophisticated scams as they happen, facilitating transactions that are simultaneously secure and seamless. Adopting a multi-layered security strategy that leverages various data points, such as a user’s online behavior, past transaction patterns, and loyalty program information, can significantly bolster fraud detection before a situation escalates into a major loss.
Acknowledging this new reality, a significant portion of the retail sector is preparing to act. Approximately 29 percent of Australian retailers are already planning to allocate resources toward AI for security and fraud prevention in the near future. This trend underscores a growing consensus within the industry that leveraging artificial intelligence is no longer a luxury but a fundamental necessity to keep pace with the continuously evolving tactics of modern fraudsters.
(Source: ITWire Australia)
