New Wave of E-Commerce Fraud: AI-Generated 'Damaged' Photos

 

 

The rapid advancement of technology has brought with it sophisticated new forms of fraud. In China, a novel and disturbing trend is gaining popularity among online consumers: using Artificial Intelligence to generate highly realistic photographs of products that appear to be damaged or defective. This new method of "consumer terrorism," as some are calling it, was especially noticeable during the recent major Chinese digital sale, the 11.11 Singles' Day event.

 

Consumers are leveraging AI photo generation not for honest representation—a past frustration where retailers used AI to unrealistically enhance product images—but to degrade them for personal gain. Instead of simply buying and returning clothes after a one-time wear, this new scam involves consumers demanding refunds by submitting AI-manipulated photos as evidence of receiving a substandard item.

The fraud is surprisingly versatile. For example, a customer who purchased apples might run a photo of their delivery through an AI program, prompting it to render the fruit as rotten, bruised, or dented. This trickery extends beyond food; vendors of small household goods have complained of buyers submitting images, such as a photograph of a seemingly rusted toothbrush, to claim a full refund.

Even clothing is being targeted. Buyers have sent in photos of dresses or shirts with pulled threads and obvious material defects. While some of these attempts can be crudely executed, making the AI origin discernible to a trained eye due to tell-tale signs like strange lighting or digital artifacts, the technology's improving realism makes detection a constant battle.

For now, one of the most effective countermeasures sellers have found is demanding video evidence, particularly for claimed defects like cracks or tears. AI-generated damage often struggles to remain stable in a video format, causing the "cracks" to flicker or disappear, which is why a significant number of fraudulent buyers abandon their refund request when asked for video proof.

The challenge, however, is that AI photo detection is not foolproof. A recent case in Japan saw an AI-generated photograph of a frog win a prestigious "Photo of the Year" prize, bypassing all detection. Given that many large e-commerce platforms tend to prioritize buyer protection over seller rights, merchants often have to issue refunds even when they strongly suspect fraud and know the damage is impossible.

Chinese platforms are beginning to catch up. A system that analyzes how frequently a customer initiates returns—a kind of social rating—was introduced relatively recently, which is surprising given the long history of low-level return fraud in China. While AI detectors were previously implemented to guard against sellers who manipulated reviews and product images, there was little focus on how buyers could use the same tools to cheat the system. As the tools for digital manipulation become easier to use, the e-commerce world faces an escalating ethical and technical arms race.

The tag in the photo states: "Genuine Product Guarantee Anti-Theft Tag. Returns will not be accepted if removed."

 

"Please ensure that the product does not affect the resale value and keep the original product accessories intact. Keep it consistent with the label of your order when the product is signed for and the clothing is intact. If you need to return or exchange the product, please return it along with its original packaging, accessories, etc. only if the label is intact and does not affect the second sale." 

 

The large anti-theft tag guarantees product authenticity and prevents fraudulent "wear and return" claims by explicitly stating that its removal voids eligibility, requiring the item, all original tags, and packaging to be pristine and intact for any accepted exchange or refund.