Fraud as a Service StatisticsThe Billion-Dollar FaaS Black Market
Fraud as a Service: Statistics & Financial Impact
Fraud as a Service isn’t talked about much… which can make it seem like an isolated problem. Due to its scale and scope, however, FaaS has become an illegal global “industry” that siphons billions of dollars out of the economy every year.
Unfortunately for merchants, the impact of FaaS can be felt far beyond the dollars and data gone down the drain from the initial attack. Between lost merchandise, added operational overhead, and a deluge of chargeback fees, a FaaS attack can dent your bottom line and lead to additional complications down the road.
It’s important to understand how big of a threat FaaS really is, so in this post, we take a look at some of the hard data around this type of fraudulent attack.
Fraud as a Service (FaaS)
Similar to software as a service (SaaS), buyers who purchase Fraud as a Service (FaaS) products don’t need to understand the inner workings of program how to carry out the fraud themselves. That’s a big problem for legitimate merchants and consumers: it means that even the least sophisticated bad actors can launch complex and large-scale attacks with nothing more than an internet connection.
The Global Financial Impact of FaaS Attacks
The global financial impact of fraud as a service (FaaS) attacks is immense, costing businesses and financial institutions billions annually through fraudulent transactions, chargebacks, and identity theft.
Because FaaS is scalable, its effects can be wide-reaching. In 2024, a single Faas-enabled, large-scale attack spanning 4,800+ incidents disrupted businesses in three verticals (social media, crypto, and payments) on every continent except for Australia and Antarctica.
No longer are fraudsters working alone to exploit vulnerabilities and steal from clients. With the help of the dark web and anonymous payment methods like cryptocurrencies, scammers are working together, sharing knowledge, and transacting with each other.
No geographic location is immune from FaaS attacks. I mentioned a second ago that Australia was exempted from one high-profile attack. But, according to a 2023 survey by Ravelin, two-thirds of businesses in Australia said they have been victims of FaaS schemes at some point. This is compared to the global average of 56% of businesses.
of businesses say they've been victims of at least one FaaS scheme
Source: Ravelin
Like legitimate business ecosystems, which magnify supply-side activity, the underground platforms that allow FaaS providers to thrive are lowering the cost of scamming, increasing the prevalence of fraud, and lowering the barrier to entry for aspiring cybercriminals.
Forecast
$107 Billion
Projected annual value of eCommerce fraud by 2029. Source: Juniper ResearchPrevalence
56%
Percentage of companies hit by FaaS attacks, with rates as high as 67% in Canada and 66% in Australia. Source: Ravelin TechnologyDemographic Shift
47%
Percentage of cybercrime cases involving someone 21 or younger. Source: ReutersAutomation Rate
80%
Percentage of login attempts across eCommerce platforms that are now attributed to automated bot traffic. Source: Neuro-ID by ExperianAnnual Impact
$16 Billion
Total fraud losses from internet crimes in 2024, a 33% increase from the previous year. Source: FBI’s 2024 Internet Crime ReportCost Multiplier
$4.61 Billion
The average cost to a US merchant for every single dollar lost to fraud. Source: LexisNexis Risk SolutionsAttack Scale
8,000
Number of incidents in the average detected FaaS attack in 2024. Source: AU10TIX 2024 The Year of FaaS ReportAcceleration
2X
Growth in the size of the average detected FaaS attack between 2023 and 2024. Source: AU10TIX 2024 The Year of FaaS ReportTechnology continues to make fraud easier, but we can help you stay ahead of the game.
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Fraud as a Service & Chargebacks
FaaS is largely a volume game. Automated attacks can generate massive waves of fraudulent purchases and chargebacks at once. This, in turn, can drive up chargeback ratios and operational costs, and do long-term damage they end up blocking real customers.
Fraud as a Service is a persistent threat faced by eCommerce merchants. Arguably the most damaging aspect, however, is the almost inevitable wave of chargebacks that follow.
A bad actor who manually commits fraud may get away with a small handful of unauthorized transactions at once. FaaS operators, on the other hand, can use botnets or other automations to place absurd numbers of fraudulent purchases in an hour. This serves as a force multiplier for chargeback volume when those charges are subsequently involuntarily reversed.
Impacts include:
