#21: Rise of Returns Fraud, Meta's Ongoing Scam Problems, Growing APP Fraud Crisis

This week, we're tackling the rise of returns fraud and how retailers are fighting back, Meta’s latest moves to curb romance scams, and the growing crisis of push payment fraud. As scams evolve, fraud fighters need stronger defenses, smarter detection, and better collaboration across industries. Let’s dive in.

NATE'S TAKE - FEBRUARY 18, 2025

Top Three This Week

1. Returns Fraud Is Rising—How Retailers Are Fighting Back
2. Meta’s Romance Scam Problem Isn’t Going Away: Can New Safeguards Help?
3. Push Payment Scams Are at a ‘Crisis Level’

1. Returns Fraud Is Rising—How Retailers Are Fighting Back

Retailers have long struggled with returns fraud, but with fraud and exploitative behavior now a major concern for 93% of merchants, the industry is being forced to adapt. A growing challenge is “friendly fraud”, where customers claim refunds for items they never return, swap in lower-value products, or abuse lenient policies. At scale, these tactics chip away at revenue and force businesses to tighten their processes.

Companies like Happy Returns are trying to solve this problem by adding fraud prevention measures at the point of return. One key addition is barcode scanning at Return Bar drop-offs, ensuring the item being returned matches what was approved. It’s a small change that adds friction, but for retailers, it’s proving worth it to reduce fraud losses.

Fraud fighters in e-commerce and retail should take note. Return policies have long been a soft target for abuse, and tightening verification processes without compromising the customer experience is a delicate balancing act. RFID technology could be the next evolution, allowing seamless tracking without the need for manual scanning.

As fraudsters continue to find new ways to game return policies, the retail industry is being forced to rethink how to verify, track, and prevent abuse.

2. Meta’s Romance Scam Problem Isn’t Going Away: Can New Safeguards Help?

Meta’s platforms remain hotspots for fraud, and romance scams are no exception. With billions of users across Facebook, Instagram, and WhatsApp, fraudsters have plenty of opportunities to impersonate, manipulate, and exploit victims. Despite past efforts to crack down, scams are still thriving, forcing Meta to introduce new safety measures in an attempt to curb abuse.

The latest updates include:

• Messenger warnings when users interact with accounts that raise red flags, particularly those based overseas.
• Call silencing on WhatsApp to block unwanted calls from unknown numbers—one of the tactics scammers use to gain trust.
• Facial recognition tools to detect and remove scam ads that misuse celebrity images to push fake investment schemes.
• Awareness campaigns aimed at educating users on how romance scams operate—but as we’ve seen (FIF19), awareness alone isn’t stopping fraud.

These changes are a step in the right direction, but the bigger issue is that scams on Meta’s platforms are out of control. Facebook Marketplace is packed with fraudulent listings, impersonation scams run rampant, and trust in the platform’s ability to moderate fraud remains shaky at best.

Meta has been under pressure to take fraud more seriously, and these updates suggest they’re trying—but whether they actually make a dent in the problem remains to be seen. For fraud fighters, it’s yet another reminder that social platforms remain prime targets for scams, and relying on platforms to self-regulate has its limits.

Push payment scams—where victims unknowingly send money directly to fraudsters—have reached crisis levels, according to consumer advocates at Fighting Payments Fraud in 2025. As these scams rapidly increase in both volume and sophistication, pressure is growing to strengthen protections.

Experts argue that banks, telecom companies, and social media platforms, including the aforementioned Meta, should be doing more to prevent fraud. Scam listings on platforms like Facebook Marketplace often trick victims into sending money to fraudsters with little chance of recovery. And although APP scams rely on fraudsters having real bank accounts to receive stolen funds, financial institutions rarely intervene at the receiving end. Experts suggest that stronger fraud detection on outgoing and incoming payments could help disrupt these scams before victims lose their money.

This latest report echoes similar concerns raised in previous newsletters, where banks faced lawsuits for denying scam victims reimbursement and failing to stop fraudulent transactions before they happened.

For fraud teams, the lesson is clear: APP fraud isn’t going away, and fighting it requires better intervention before money moves—not just investigations after the fact. As the pressure mounts on banks and tech companies alike, preventing push payment scams has to become a shared responsibility.

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