Sophisticated scam websites highlight new fraud risks for retailers…

Retailers, banks and payment providers are being warned about a growing wave of AI-generated scam stores that are becoming increasingly difficult for consumers to identify.

Mastercard says fraudsters are using generative AI to create convincing ecommerce websites complete with fake customer reviews, deepfake content and professional branding, allowing fraudulent merchants to launch online storefronts quickly and at minimal cost.

The warning comes as online scams continue to rise globally. According to the Global Anti-Scam Alliance, consumers lost an estimated $442 Billion to scams in 2025, with fake merchants contributing to growing concerns around trust in digital commerce.

“Digital commerce only works when people trust what’s on the other side of the screen,” said Ann Johnson, Executive Vice President of Security Solutions at Mastercard.

Some scam sites deliver counterfeit products, while others take payment without fulfilling orders. Mastercard also warned that many fraudulent stores are being used to harvest payment card details for wider phishing and fraud schemes.

The company said traditional fraud controls are struggling to keep pace as scam merchants can appear and disappear rapidly. In response, it has introduced new merchant risk tools designed to help payment providers identify suspicious businesses earlier in the onboarding process.

Mastercard said a pilot programme found its merchant risk technology identified around 80% of high-risk merchants, in some cases up to 90 days before formal escalation.