Fraud Detection and Prevention—Best Practices for 2025

Learn about the types of fraud on the rise in 2025, the latest strategies for fraud detection and prevention, and how these align with regulatory compliance requirements.

Fraud is one of the biggest threats to companies worldwide. Failure to properly confront fraudsters results in both financial and reputational losses. Moreover, fraud can trigger regulatory penalties for non-compliance with anti-money laundering (AML), counter-terrorist financing (CTF), and other regulations.

In the US only, according to the 2025 Federal Trade Commission Report, reported consumer losses to fraud hit $12.5 billion in 2024, a 25% increase over 2023. Investment scams and imposter scams were the largest contributors to losses.

Overall, fraud is expected to grow rapidly in frequency, scale, and sophistication through 2030, driven by technological advances, more digital transactions, and deep penetration of AI into all spheres and industries—including organized crime. This is prompting significant investments in fraud detection and prevention technologies worldwide.

According to Mordor Intelligence, the fraud detection and prevention market is projected to be valued at USD 58.18 billion in 2025 and is expected to grow to USD 153.91 billion by 2030, reflecting a CAGR of 21.48% over the forecast period (2025–2030).

However, not all anti-fraud systems are created equal. Different industries face unique fraud risks and require tailored solutions.

At Sumsub, we’ve compiled a comprehensive guide to fraud detection and prevention techniques. We’ve also gathered all our industry-specific guides in one place. Here, you’ll also find the essential features an anti-fraud solution must have to stay effective in 2025 and beyond.

What is fraud detection and prevention?

Fraud detection involves continuously monitoring users, their transactions, and behavioral patterns to identify signs of fraudulent activity. This could include tracking unusual changes in a user’s geolocation, spotting abnormal purchasing behavior, or flagging suspicious account activity.

As technology evolves, so do the tactics used by fraudsters. To stay ahead, companies are increasingly adopting advanced fraud detection tools, including automated systems and AI-powered solutions, to quickly identify and respond to emerging threats.

Fraud prevention, on the other hand, focuses on proactively stopping fraud before it occurs. It is built around company policies informed by thorough risk assessments, which help identify the most likely types of fraud a business might encounter. To remain effective, these assessments—and the resulting preventive measures—must be updated regularly to match the changing risk landscape.

Fraud detection and prevention are complementary components of a robust anti-fraud strategy, integrating seamlessly to combat threats—often using AI and automation to adapt to new fraud patterns as they emerge.

Fraud trends to watch for in 2025

In 2025, the fight against fraud is becoming increasingly complex and challenging, fueled by rapid technological advancements and the growing sophistication of cybercriminal tactics.

According to Sumsub’s latest Identity Fraud Report, identity fraud cases more than doubled between 2021 and 2024. During the same period, 67% of companies reported a rise in fraudulent activity.

The report also highlights a global shift toward more sophisticated and hybrid fraud schemes, along with the growing democratization of fraud as it becomes increasingly accessible and cost-effective to carry out. Artificial intelligence is now a major driver of these threats, with deepfakes accounting for 7% of global fraud incidents. AI is also widely used to create fake documents—a fraud type that now makes up 50% of all reported cases. As a result, businesses, users, and regulators alike are under increasing pressure to adapt their defenses in real time.

These are just a few of the alarming trends shaping the fraud landscape in 2025:

• Fraud-as-a-service
• The spread of deepfakes into everyday life
• AI-driven fraud beyond deepfakes
• The rise of hybrid fraud attacks

Explore the full list of fraud trends for 2025 in our article: Fraud Trends for 2025: From AI-Powered Scams to Identity Theft and Fraud Democratization

Most common types of fraud in 2025

Fraud may take many forms depending on the region and businesses that are targeted.

In 2025, the most common types of fraud include:

AI-generated fraud

In 2024, deepfakes became deeply entrenched as accessible fraud tools, with a 4x increase in detections since 2023, now accounting for 7% of all fraud attempts. It’s easier than ever to create realistic fake content, from false news to synthetic identities. However, AI-driven fraud goes beyond deepfakes, fueling synthetic voices, chatbot impersonations, and fake document production. AI has enhanced the sophistication of digital fraud (e.g., deepfakes, synthetic identities) and related physical scams (e.g., forged documents).

Multi-accounting

Multi-accounting occurs when a single user creates multiple accounts to exploit an online service. This tactic is often used to repeatedly access free trials, discount codes, bonuses, or to bypass bans. While multi-accounting isn’t always fraud on its own, it often enables various fraudulent activities, such as promo abuse and smurfing.

Let’s take a look at the types of fraud involving multi-accounting that are on the rise in 2025:

• Promo abuse : Misusing a company’s promotional materials, such as referral bonuses, vouchers, or discounts.
• Fraud networks: Organized groups using multiple accounts to commit criminal activities, allowing various types of digital fraud.
• Money muling: A method where criminals use individuals with clean records to transfer illicit funds.
• Smurfing: In video gaming, involves creating low-level accounts to compete against less experienced opponents. In finance, breaking large sums into smaller transactions to avoid detection.

Payment fraud

Payment fraud involves stealing payment information to make unauthorized transactions, including:

• Chargebacks: Refund requests for disputed transactions often following stolen card purchases.
• Credit card fraud: Leaking full card details to allow unauthorized purchases.
• Card testing (or carding): Testing stolen card numbers to find valid ones, key for detecting and stopping such attacks early.

Account takeover

Account takeover (ATO) occurs when fraudsters gain unauthorized access to a user’s online account. Tactics like phishing and data breaches allow them to exploit the account for financial gain.

Key strategies for fraud detection and prevention in 2025

Companies need to implement comprehensive multi-layered solutions to detect fraud at various stages.

Some preventative practices include:

• Advanced identity verification solutions
• Transaction monitoring
• Behavioral pattern checks
• Robust user verification and continuous monitoring

Regulatory compliance and fraud prevention in 2025

US

Bank Secrecy Act (BSA): Requires financial institutions to establish AML programs.

USA PATRIOT Act: Expands AML obligations, including customer identification.

Corporate Transparency Act (CTA): Mandates beneficial ownership reporting.

EU

Union Anti-Fraud Programme (UAFP): Provides strategic direction for anti-fraud actions.

PIF Directive: Harmonizes definitions against fraud affecting EU financial interests.

EU Anti-Fraud Office (OLAF): Coordinates investigations to protect EU financial interests.

APAC

Hong Kong AMLO: Mandates customer due diligence and suspicious transaction reporting.

Singapore’s MAS Notice 626: Sets out AML/CFT requirements for financial institutions.

Australia’s Scams Prevention Framework Bill 2025: Establishes a legislative framework to prevent and report scams.

Future trends in fraud prevention

Emerging technologies

• AI/ML Analysis: Enables real-time analysis of datasets.
• Threat intelligence: Helps detect fraudulent activity by analyzing suspicious data.
• Behavioral intelligence: Analyzing user behaviors to detect deviations that may suggest fraud.

Adapting to evolving fraud tactics

• Continuous learning systems: Ensure that fraud detection mechanisms evolve with emerging threats.
• Cross-industry collaboration: Sharing information on fraud trends is essential for comprehensive protection.

FAQ

What's the difference between fraud prevention and fraud detection?

Fraud prevention aims to stop fraud before it happens, whereas fraud detection identifies suspicious activity after it occurs.

What are the most effective methods for detecting fraud?

Real-time transaction monitoring and anomaly detection are among the most effective methods.