Fraudulent sellers are using generative AI tools to invent fake brands or dupe products to get users to pay for goods that don’t really exist, Nicolas Waldmann, who heads TikTok Shop’s governance and experience external affairs team, told Business Insider Tuesday (Nov. 11).
“It’s organized crime, to be honest,” Waldmann said. “They’re trying to basically go through and sell, and of course, never deliver anything, and then run with the money.”
As the report noted, eCommerce fraud is nothing new, but generative artificial intelligence (AI) tools have allowed scammers to refine their methods, leading companies to employ the same technology to fight back.
For example, Amazon announced in March that its AI tools had helped it ensure that counterfeiters were held liable while increasing brands’ use of its brand protection features.
The tech giant’s AI tools that block infringements stopped more than 99% of suspected infringements before a brand had to find and report them, Amazon said. The company added that its AI tools had helped drive a 35% reduction in the number of valid notices of infringement submitted by brands, compared to 2020, even as its available product numbers have grown.
In TikTok’s case, the Business Insider report said the company employs a mix of human and AI moderation to identify fraudulent accounts and listings. The social media platform has its own in-house detection tools, and teams with outside firms to manage tasks such as authenticating pre-owned luxury goods.
“We use AI to basically deal with AI,” said Waldmann, whose company rejected 70 million products and removed 700,000 sellers for policy violations in the first half of 2025.
Research by PYMNTS Intelligence has shown the level to which businesses are turning to tech to combat fraud, with 52% saying they’ve employed new AI models for fraud detection.
Retailers are using adaptive machine learning systems to identify anomalies in real time, reducing false positives by up to 85% while doubling compromised card detection.
However only 37% use generative AI for fraud protection, even as 72% anticipate AI-driven fraud to be their number challenge by 2026, according to the report “Securing the Season: Fighting Fraud Without Losing Customers.”
“What emerges from the data is a broader operational shift. Merchants no longer see fraud protection as a cost center or a seasonal emergency plan,” PYMNTS wrote last month.
“It’s becoming a brand-defining capability that shapes reputation, customer loyalty and long-term profitability. According to the report, 93% of eCommerce businesses say anti-fraud tools improve the overall customer experience, provided those tools don’t slow checkout.”
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