Fake AI Images Used For Refunds, China Sees Sharp Rise In Refund Scams

New Delhi: These days, a new form of online fraud is being seen in China, in which people are getting refunds by creating fake photos with the help of Artificial Intelligence (AI). Shoppers use photos to make items appear damaged or broken—but these photos are often not real but AI-edited. 

What problems are companies facing?

Some people take real photos of fresh fruit, clothing, or other items and then use AI to make them look “spoiled”—by making the fruit look rotten, the clothes have holes in them, or electronic items have scratches. In such cases, when the seller investigates, it often turns out that the photo was not genuine—but in many cases a refund has already been issued. 

How much did fraud increase, and how?

Reports say that such AI-generated fake photos have led to a rise in refund claims. During some large online sale events (such as China's “Double 11” sale), sellers have complained that many fake refund requests were sent—including photos that were AI-edited. These fake claims have not only increased the losses of the sellers but have also raised questions on the credibility of e-commerce companies. 

What dangers lie ahead?

When fake photos look so real that even companies can be fooled—then the credibility of online refund and return systems is at risk. If this kind of fraud becomes common, the costs of e-commerce platforms will increase; also, trust in legitimate customers and sellers will decrease. It's not just a loss of money—the foundation of digital trust and honesty on the internet is also being questioned.

What else should be done?

Some Chinese platforms have turned off the “refund only” option—meaning no automatic refunds without proper verification. Some companies have now started asking for video evidence or transaction records in such claims so that it can be known whether the photo is real or edited. Experts say that in the future, better AI-detection tools, photo/video verification systems, and digital-scoring mechanisms will be required to prevent such frauds. 

Is this just China's problem?

Although these reports are specific to China, as recent incidents have shown, AI can be used anywhere to commit significant fraud and refund fraud. In the last few days, a case also came to light in India, where someone sent an AI-edited photo and got a refund—this shows that this is not just a problem of China or any one country. Therefore, if companies and customer-support teams are not alert, this problem could spread globally.