AI-generated damage claims are one of the fastest-growing forms of returns abuse, new data from fraud prevention platform Forter reveals, as retailers face a surge in AI refund fraud.

Its figures suggest that over 80% of fraud attacks on retailers now use AI, with instances of AI-powered fraud rising +15% in the last six months, as rising AI adoption gives rise to doctored images to evidence damages and defects.

Over two fifths (44%) of retailers are now being impacted by returns and refund abuse, with shoppers and organised criminals using AI to create fake damage claims or generate evidence, such as fabricated receipts, to support return scams.

Michael Reitblat, CEO of Forter, said that growing AI adoption was enabling “more sophisticated fraud, at a larger scale.” He added that “often it’s hard for the retailer to see something’s wrong, especially if it goes to call centres, where they’re not trained in detecting AI-doctored images.”

Forter said instances of retail AI fraud are now evolving faster than legacy systems can detect and effectively respond to, with returns becoming a major chink in brands’ armour.

Categories, such as fashion – which already experiences some of the highest returns rates within the sector – remain particularly prone to abuse, layering on additional cost pressures to already thin margins.