Fraud losses increased for nearly 60% of companies, while over half of consumers are still concerned about doing things online
Experian, a global data and technology company, released its 2025 U.S. Identity and Fraud Report revealing over a third of companies say they are using AI, including generative AI, to fight fraud. As fraud threats grow increasingly complex, companies are accelerating their investments with over half adopting new analytics and building AI models to enhance customer decision-making.
The report also highlights growing concern over AI-generated fraud and deepfakes with 72% of business leaders expecting these to be major challenges by 2026. While some businesses are more open to embracing AI for fraud prevention, consumer trust remains low. Less than 1 in 4 report interacting with AI-driven tools like chatbots, and just 18% completely trust these tools.
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“With the widespread use of generative AI, fraud is evolving faster than many businesses can keep up with,” said Kathleen Peters, Chief Innovation Officer, Experian North America. “As a trusted partner to organizations across diverse industries, we take a proactive approach to fraud prevention — combining data, advanced analytics and innovative technology to address both emerging and future threats. We’re committed to ensuring the delivery of seamless user experiences while fostering trust at every interaction.”
Rising fraud concerns for businesses and consumers
This year’s data shows that businesses are feeling the pressure with 90% reporting concern about fraud and 70% saying they are increasing their fraud prevention budgets. In fact, nearly 60% of companies reported an increase in their fraud losses year-over-year with identity theft, transactional payment fraud, account takeover, peer-to-peer payment scams and first-party fraud identified as the top fraud events experienced last year.
At the same time, 57% of consumers are still concerned about doing things online. Their top fears include identity theft, stolen credit card information, online privacy, fake/phishing emails, messages or phone scams, and false information. In fact, according to the FTC, consumers reported losing a record $12.5 billion in fraud losses in 2024, which is a 25% increase from the previous year.
The need for modern fraud detection
As a result of these concerns, customers are raising their expectations for businesses when it comes to keeping them safe online. Over 80% expect companies to act on security or privacy concerns, and half want stronger online safeguards. While 85% of businesses believe their fraud controls align with consumer expectations, less than half of people are highly trusting of companies to address their concerns online.
At the same time, businesses are still relying on verification methods like passwords and PINs, while more secure methods that people say make them feel safest, like biometrics and behavioral analytics, remain underused. This disconnect highlights the need for organizations to not only invest in innovative fraud prevention methods that meet consumers’ expectations but also communicate clearly and consistently so their customers can feel more secure and confident.
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