A group of first-time Zip customers in the United States has defrauded the buy now, pay later provider of about $10 million, raising concerns about the company’s risk controls and sending its stock price into freefall.

Zip shares lost half their value, falling to $1.025 as the market opened on Friday, before recovering somewhat to finish the day down 29.5 per cent at $1.46, after the company said in a quarterly update that the fraud had hit transaction volume and new customer growth in July and August.

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