What is Cyberfraud? The Complete Guide to Detection, Prevention, and Protection in 2025

Cyberfraud is when criminals use digital deception to steal money or sensitive data or to gain unauthorized access to systems. 

Cybercriminals combine technology, like bots or malware, with the tools of classical fraud (e.g., social engineering) to target individuals and organizations on a scale so massive it was unimaginable only a few decades ago, before the advent of online banking and ecommerce.

Modern attackers often use a mix of sophisticated bots, AI agents, and human activity to mimic legitimate users and steal money or sensitive data. This creates a constantly evolving threat landscape where digital trust is under siege.

Modern cyberfraud rarely involves an isolated criminal act. Instead, today’s fraudsters use automated bots to attack iteratively; either extremely quickly at a very high volume, or by using “low and slow” tactics to blend in with normal traffic and evade traffic-spike detection. 

By using automation, attackers can scan thousands of websites for weaknesses, test millions of stolen passwords at once, or create fake accounts in bulk.

Key attack vectors include:

• Web Scraping: Bots extract content, pricing, or other valuable information from websites
• Carding: Bots test stolen credit card numbers on payment pages to see which ones are valid

• Denial of Inventory: Bots add products to shopping carts or otherwise reserve items without purchasing them, which prevents real customers from buying them

• Phishing and Social Engineering: Deceptive emails, texts, and websites are used to trick users into sharing credentials or installing malware; this technique often uses personal information harvested from social media to personalize messages and make them more realistic
• Account Takeover (ATO): Bots attempt to gain unauthorized access to user accounts by guessing credentials or using stolen ones
• Fake Accounts: Stolen or synthetic identities are used to bypass verification systems and exploit promotional offers
• Other Forms of Transaction Manipulation: Refund or return fraud, reselling goods purchased with stolen credentials, etc.

The most successful cyberfraud campaigns blend these tactics, using bots for speed and scale, then switching to human operators for tasks that require judgement or interaction in real time.

1. Identity Theft

Fraudsters steal personal information in order to impersonate their victims online, enabling fraudulent account openings and loan applications. 

For example, in taking over a user’s account, attackers might steal personal information about the victim, such as their name, address, or Social Security number. This information can then be used for further fraudulent activity like opening accounts or applying for credit in the victim’s name.

In 2024, the FBI reported that cyber-enabled fraud, including identity theft, accounted for almost 83% of all reported financial losses, which totaled $13.7 billion.

2. Account Takeover (ATO)

Criminals gain unauthorized access to online accounts using stolen login information or other credentials, resulting in financial theft and data breaches. 

Bots can automate credential stuffing attacks, rapidly testing thousands of stolen username-password pairs.

Once they’ve accessed a victim’s account, attackers can commit any number of crimes, from making fraudulent purchases using stored payment data, to posting fake reviews under the victim’s name, to distributing phishing emails like the ones described above.

3. Phishing and Social Engineering

A broad and opportunistic form of email-based cyberattack in which the attacker sends out a deceptive message to many users at once, hoping to trick some of them into sharing sensitive information. 

For example, a phishing email that looks like it’s from HR tricks users into entering their credentials on a fake website, which leads to a data breach.

4. Payment Fraud

Unauthorized financial transactions like stolen credit card usage and false refund requests. In 2023, online payment fraud was projected to reach $48 billion in global losses. And in 2024, attempts to make purchases using stolen credit card numbers accounted for more than 51% of all checkout traffic in the retail and ecommerce sector.

5. Synthetic Identity Fraud

Fraudsters create new identities by combining real and fake information. These identities can then be used for crimes like the creation of fraudulent financial accounts. 

For example, a cybercriminal combines a fake name and birthdate with a real stolen Social Security number to open a credit card account. This is one of the fastest-growing forms of financial crime in the US, and it significantly impacts banks and lenders.

Synthetic identities can also be used for other types of fraud, such as evading regulatory scrutiny or conducting influence campaigns.

6. Business Email Compromise (BEC)

A highly targeted form of email-based cyberattack. Attackers impersonate specific executives or vendors to manipulate employees into sending money or sensitive information. 

BEC was a leading cause of financial loss in 2024, with the FBI’s Recovery Asset Team focusing on freezing fraudulent funds.

7. Loyalty and Reward Fraud

Fraudsters manipulate customer reward programs using fake accounts or points stolen from accounts that have been compromised through ATO. These schemes usually target retail, travel, or food delivery platforms. Major retailers report millions in annual losses.

8. Refund and Return Fraud

Criminals exploit return policies by accessing the purchase history of a compromised account, then exploiting refund policies by requesting refunds on products they never purchased, or by returning different or damaged items (or nothing at all).

E-commerce platforms face escalating losses, especially during peak shopping seasons.

9. Promotion Abuse

Attackers exploit online discounts and sign-up bonuses using multiple accounts or bots. For example, fraudsters might create multiple fake or synthetic accounts to collect rewards for referring “friends” which are actually just more fake accounts the attacker controls.

Food delivery apps in particular report widespread abuse of new-user promotions, which costs these companies millions annually.

10. Online Marketplace Fraud

Includes fake seller listings, buyer scams, and feedback manipulation. Major marketplaces regularly remove thousands of fraudulent listings to protect legitimate users.

Cyberfraud directly threatens business viability in a few ways:

Financial Devastation: As stated above, in 2024, cybercrime losses totaled $16.6 billion, with cyber-enabled fraud comprising 83%. The average data breach cost reached $4.88 million, the biggest increase since 2020.

Brand Trust Erosion and Customer Churn: Data breaches systematically erode consumer confidence and cause long-term reputational damage. Customers frequently abandon brands that fail to protect their information. 

A recent survey found that 56% of customers completely lose trust in a company once its data has been breached.

UX Friction: Cyberfraud can also indirectly affect the user experience if password rules become frustratingly complicated or false positives trigger frequent identity checks.

Our own research has found that 40% of real humans have abandoned a purchase at some point because of CAPTCHA aggravation.

Today’s cybercriminals operate with unprecedented sophistication:

Advanced Automation: The rising sophistication of AI-powered tools promises to magnify the power of bots used for cyberattacks, while at the same time, AI’s increasing accessibility will lower the barrier to entry for aspiring fraudsters.  

Experts are already warning about the imminence of fully autonomous AI agents that will be capable of independently executing entire attack campaigns triggered by a simple natural-language prompt.

Fraud-as-a-Service: Criminal marketplaces offer phishing kits and other tools for scammers that significantly lower the barrier to entry for would-be cybercriminals.

Botnet-as-as-Service: Cybercriminals rent access to a large network of infected devices, or botnet, to other attackers, which allows even those with little technical skill to launch sophisticated attacks like those listed above. 

Professional Operations: These services are often structured like legitimate businesses, offering user-friendly interfaces and subscription plans that lower the barrier to entry into cybercrime.

Fraudulent Human Actions: In some instances, cyberfraud is led by human rather that bot activity; for example, when click farming or committing post-login attacks that are too complex for today’s bots.

Today’s cyberthreats are dynamic; they often combine bots with human intervention and, increasingly, AI automation. 

This means that users now require a layered and adaptive approach to prevention that is flexible enough to cover all phases of the user journey.

1. Advanced Authentication

While multi-factor authentication (MFA) is essential, it can sometimes be bypassed using social engineering tactics.

To make your accounts even safer, combine continuous monitoring systems that can check for suspicious activity in real-time with MFA and/or whichever other mitigation strategies make sense for your particular use case.

2. Full User Journey Detection

Monitor complete user sessions to detect “low-and-slow” fraud patterns, such as fake account setups followed by downstream abuse.

3. Multi-Vector Threat Differentiation

Prevention systems must be able to detect threats coming from multiple vectors:

• High-speed bot attacks (such as credential stuffing, scraping, carding, scalping, fake interactions, etc.)
• Human-led tactics (such as manually logging into an account using stolen credentials, manually making a fraudulent transaction, refund fraud)
• AI-driven threats (such as scraping to train an LLM)

4. Customizable Response Mechanisms

Use smart security tools like silent enforcement and targeted verification to minimize false positives.

5. Secondary Detection and Analysis

Use solutions that can look beyond traffic volume to see what users or bots are actually trying to accomplish, and protect yourself against future attacks by deploying post-decision analysis to spot patterns and new tricks used by cybercriminals.

Specific types of post-decision analysis include attack profiling (understanding the characteristics of specific attacks), network attack event detection (identifying and correlating coordinated fraud), and linking related incidents by analyzing the characteristics of known attackers or fraudulent requests.

6. Integrated Threat Intelligence

Centralize intelligence across authentication, transaction, and customer systems for earlier detection and faster investigations.

7. Manage “Good Bots,” Crawlers, and AI Agents

Make sure your detection strategy gives you enough detail that you can respond appropriately to the different types of traffic on your domain. 

You should be able to view your traffic with enough granularity that you can distinguish among legitimate traffic that should be monetized, malicious traffic that should be blocked, and traffic from “good” bots that should be whitelisted (search engine web crawlers, for example).

8. Business Impact-Focused Metrics

Evaluate success by tracking:

• Reduced fraud losses
• Preserved customer trust
• Improved conversion rates

An outcome-driven approach makes sure your security method also supports the growth of your business, rather than merely reducing risk. For example, strong security (and the high trust that it brings) can help attract high-value partnerships and facilitate expansion into new markets.

Today’s cyberfraud is dynamic and continuously evolving, so fighting it requires a holistic approach toward defense strategies. 

By keeping up to date with the latest cyberfraud schemes and investing in comprehensive, outcome-driven protection, your organization can effectively safeguard your customers, your business, and your reputation.

The key is to use an approach to security that’s intelligent enough to adapt to new threats as soon as they emerge, yet flexible enough to do it in a way that doesn’t needlessly disrupt the user experience. 

Overall, as cybercriminals improve their tactics, businesses should rise to meet them, using constantly-evolving defense tactics that are as sophisticated as the ones used by their attackers.

As Sun Tzu famously wrote, “If you know your enemy and know yourself, you need not fear the result of a hundred battles.”