Online Fraud Losses to Reach $3.9bn in 2025, Set to Escalate in 2026
By Praisebell Rosemond Larbi
Online fraud is expected to inflict losses of up to US$3.9 billion in 2025, with projections indicating further increases next year, as criminals increasingly exploit e-commerce platforms and digital payment systems.
This warning comes from Rob Woods, Senior Director of Fraud and Identity at LexisNexis Risk Solutions, who spoke on CNBC Africa about the growing threat of artificial intelligence–driven fraud in online transactions. Woods highlighted that e-commerce and digital shopping environments are particularly vulnerable to sophisticated attacks, including account takeovers, identity theft, and payment fraud.
According to Woods, the rapid adoption of digital commerce, accelerated by global shifts in consumer behaviour, has created fertile ground for fraudsters. Artificial intelligence tools are being leveraged to automate attacks, making detection and prevention more challenging for businesses. “The scale and sophistication of online fraud are increasing exponentially, and unless companies adopt advanced risk management strategies, losses will continue to rise,” he warned.
The LexisNexis analysis shows that small and medium-sized enterprises, which often lack robust fraud detection systems, are at heightened risk. Fraud not only leads to direct financial losses but also undermines consumer trust, increases operational costs, and can result in long-term reputational damage.
Looking ahead, Woods predicts that 2026 could see an even larger escalation in fraud losses if preventative measures are not strengthened. He stressed the importance of investing in AI-driven fraud detection, multi-layered authentication, and continuous monitoring to mitigate the rising threat.
Experts also emphasise the role of consumer awareness in combating online fraud. Educating shoppers about phishing scams, safe payment practices, and identity protection can reduce vulnerability and help limit financial losses.
As e-commerce continues to grow globally, Woods’ warning underscores the urgent need for collaboration between businesses, financial institutions, regulators, and technology providers to develop proactive strategies that safeguard both merchants and consumers against evolving online fraud threats.
