Understanding Ecommerce Fraud & Scams in Japan: What Your Global Business Needs to Know
While Japan has long been recognized for its safety and low crime rates, a significant shift is underway, with fraud and scam-related losses reaching a ten-year high of 54 billion yen in 2024. Learn about these evolving fraud patterns and how to prioritize customer trust for sustainable growth in Japan.
When most people think of Japan, fraud probably isn’t the first thing that comes to mind. Known for its safety, order, and strong cultural values, Japan has long enjoyed a reputation as a low-crime country. But things are shifting. In 2024, fraud and scam-related losses reached a ten-year high — totaling a staggering 54 billion yen. So, what’s behind this rise, and what should businesses know if they’re operating in or looking to enter this evolving market?
A Generational Shift Driving Change
One of the biggest factors is the changing dynamic between generations. Japan has a rapidly aging population, with fewer young people coming up behind them. Traditionally, the country has been guided by values like trust, honor, and honesty — passed down from older generations.
But as younger people grow up in a world shaped by global media and social platforms, those traditional values are starting to shift. Many young job seekers, eager to keep up with modern lifestyles, are falling victim to job scams. These scams often look like attractive, well-paid online opportunities — but they can lead unsuspecting youth into activities like data theft or even participating in credit card fraud.
Romance Scams: Exploiting the Lonely
Another troubling trend is the rise of romance scams, especially targeting older adults. As more seniors live alone or with limited support networks, they can become vulnerable to scammers posing as romantic partners.
Once trust is established, the scammer starts asking for money — sometimes for emergencies, travel expenses, or fake investments. Because the victim believes in the relationship, they may send large sums, sometimes even draining savings or taking out loans. It’s a heartbreaking form of fraud that highlights the emotional and generational gaps scammers exploit.
Fighting Back: Banks and 3D Secure 2.0
To help combat this wave of fraud, Japanese banks are rolling out 3D Secure 2.0 — an enhanced security system for online payments. It typically involves a one-time password or additional verification step during checkout to confirm that it’s really you making the purchase.
While it’s a smart move for preventing stolen card use, it’s not without its challenges. Many older consumers in Japan aren’t fully comfortable with digital payments as it is — and adding another layer of complexity might discourage them from completing purchases.
Businesses are rightly concerned about what this means for online sales. The key will be ensuring smooth implementation. That means businesses need to be ready to support this added layer of security, and banks must make the process as user-friendly as possible.
Turning Risk Into Opportunity
Despite the rise in fraud, Japan still holds strong potential — especially in the growing ecommerce space. Younger generations are embracing online shopping and are increasingly open to international brands and trends.
For companies looking to grow in Japan, understanding these shifting fraud patterns and security updates is essential. It’s not just about preventing financial losses — it’s about building lasting trust with your customers.
Want to dive deeper into what’s happening in Japan’s fraud landscape? Check out recent episode of True Fraud.
Thinking about expanding your sales in Japan? Our Merchant of Record model can help.