Consumers use AI-generated fake product images to fraudulently obtain refunds
Consumers in China have reportedly been using AI image generation tools to create fake product defect photos, then submitting fraudulent refund requests to online merchants claiming quality issues. Merchants report significant losses, particularly from low-value items, and a lawyer stated such conduct may constitute fraud under Chinese law.
What happened
Consumers have been using AI image generation tools to create fake photos of product defects, such as adding mold to fresh fruit, tears to clothing, or cracks to ceramic items. These manipulated images are then used to submit fraudulent refund requests, often labeled 'refund only' with no return, to online merchants on major platforms.
In one reported case, a ceramic shop owner in Xi'an received a refund request claiming the cup had multiple cracks, verified the image using AI detection tools which showed 92% probability the image was AI-generated, and found pixel distribution inconsistencies. When asked to provide video verification, the buyer declined and withdrew the request.
Merchants report that some counterfeit images have obvious AI generation artifacts, including inconsistent lighting angles and improperly removed watermarks, while some buyers refuse to provide alternative video verification despite being asked to change angles.
Reported impact
Merchants across multiple product categories including clothing, cosmetics, footwear, plants, and fresh produce report frequent economic losses from fraudulent refund requests. Items under 100 yuan are reported as particularly targeted due to small per-transaction amounts combined with high transaction volume.
Vendors report facing a dilemma where individual losses are small but cumulative damages are significant, yet the cost of litigation to recover individual refunds exceeds the transaction value, making it economically impractical to pursue legal remedies.
Index analysis
A lawyer from Shaanxi Province reportedly stated that consumers using AI-generated fake images to claim product quality issues and request refunds may constitute fraud, potentially resulting in administrative penalties or criminal prosecution depending on the severity.
Governance controls
Taobao and Tmall announced in January 2025 plans to establish an account integrity system covering abnormal refund-only requests, return package switching, false returns, and photo/image manipulation. Merchants can report violations for platform actions including refund rejection, store-level or platform purchase restrictions.
The platforms stated they will cooperate with authorities to transfer cases of professional fraudsters to judicial bodies for prosecution.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.