Merchants Guide To Fraud In Brazil – Part I

For merchants in high-risk sectors like sports betting and forex, entering the Brazilian market requires a solid understanding of the local fraud landscape. 

In 2023 alone, Brazil recorded approximately 3.7 million fraud attempts, translating to BRL 3.5 billion in losses. 

Read Also: 

• The Best Brazil Payment Gateways
• Payment Regulations In Brazil: Requirements You Need To Meet For Payment Processing In Brazil
• Payment Methods In Brazil: A Guide To Payments In Brazil

Although this figure shows a decline of 28.3% from 2022, the risks are still significant, with an average fraud attempt ticket value of BRL 925.44, according to ClearSale’s “Mapa da Fraude” report.

Given these attacks’ high volume and value, cross-border merchants must prioritize fraud prevention strategies. 

In the first part of the Merchant’s Guide To Fraud In Brazil, we will cover: 

• Most Common Types Of Online Fraud In Brazil 
• Fraud and Payment Methods

Let’s get started!

Most Common Types of Online Fraud in Brazil

Fraudsters in Brazil often use advanced methods to exploit vulnerabilities in online transactions. Some of the prevalent types include:

Card-Not-Present (CNP) Fraud

With Brazil’s surge in online shopping, CNP fraud has become a major issue. Fraudsters use stolen credit card information to make unauthorized purchases, capitalizing on weak verification processes and stolen data from past breaches.

Synthetic Identity Fraud

By combining real and fake information to create new identities, fraudsters can apply for credit or make purchases that are challenging to trace. 

This fraud type is particularly challenging to detect as it often combines authentic data — like the CPF (Cadastro de Pessoa Física), the Brazilian taxpayer identification number — with fabricated details.

Account Takeover (ATO)

Fraudsters gain control of user accounts through phishing, data breaches, and social engineering tactics. Once inside, they can make purchases or transfer funds undetected, putting merchants and consumers at significant risk.

Understanding these common fraud tactics helps merchants implement more robust preventative measures, from advanced authentication systems to anti-fraud monitoring tools.

Fraud and Payment Methods

Payment fraud is heavily tied to the types of payment methods used. In Brazil, credit cards remain a high-risk method due to their widespread use and relatively easy accessibility for fraudsters.

Credit Card Fraud

Credit cards are frequently targeted in Brazil, with fraud tactics ranging from traditional CNP fraud to sophisticated chargeback scams. Chargebacks, a major concern for high-risk industries, often result in substantial financial loss for merchants. 

Fraudsters may exploit card refund policies to obtain refunds fraudulently, which is a significant concern for merchants targeting the Brazilian market.

Pix Fraud

Introduced in November 2020, Pix is a real-time payment system developed by the Central Bank of Brazil. 

Although Pix is popular for its speed and convenience, it has also attracted fraud attempts. Fraudsters use phishing schemes or fake QR codes to redirect users’ funds. 

Unlike card fraud, Pix fraud is challenging to reverse due to the instant nature of the transactions, which can significantly impact a merchant’s ability to manage fraud effectively.

Up Next: Uncovering Online Fraud Prevention In Brazil

In our next article, we will cover important aspects of fraud prevention in Brazil. We will cover: 

• The Role Of CPFs in Online Fraud In Brazil 
• Fraud Prevention In Brazil: How To Protect Your Business

Check out Part II of our Merchant’s Guide To Fraud In Brazil here.

Meet CommerceGate, Your Payment Advisor In Brazil

CommerceGate allows businesses to plug into Latin America and leverage the power of real-time transitions in Brazil. Contact CommerceGate today to learn more about how we can support your success in Brazil or book a free call with one of our Experts here.