AI Fraud

Criminals commit AI fraud by using various AI-based technologies that help them succeed with their scams. Such fraudulent activities are powered by AI and machine learning (ML), which enables fraudsters to mimic human intelligence and problem-solving. Examples of some common types of AI include generative AI, natural language processing (NLP), or speech recognition. This technology can create deepfakes, phishing attacks, social engineering attacks, and more when used fraudulently. 

Yes, regulators and cybersecurity experts agree that AI fraud has to be fought with the same weapon — AI. Since AI is built on large data sets, both labeled and unlabelled, it can be used to detect suspicious behavioral patterns linked to fraudulent activity automatically. 

This has been a major milestone for the RegTech industry, which now offers a bunch of AI-powered solutions designed to detect and prevent fraud, money laundering, terrorism financing, and more. For example, such automated solutions can screen clients’ transactions in real-time, spotting AML red flags. Similarly, biometric verification solutions can detect deepfake videos during ID verification checks. 

No. AI-enabled software and all sorts of fraud prevention solutions need human supervision. This means they can’t operate on their own, as they need updates, check-ins, and an overall assessment of data accuracy. False positives happen, which need to be supervised in institutions that handle transactions and personal data. Additionally, clients can be flagged as high-risk despite eventually finding out they’re not linked to fraud. 

Standard security measures can help you prevent AI fraud and keep your identity protected. 

Some steps you should remember include actions like:

• Hanging up on suspicious callers, especially if they sound urgent and pushy. Block spam numbers. 
• Be careful when sharing personal details on social media. Never share your email or phone number.
• Don’t click on unknown links, and avoid downloading suspicious files.
• Audit your email inbox and all social media accounts for suspicious activity. 
• Use a password manager, and don’t recycle your passwords. 
• Report fraud and scams, preventing others from becoming a victim of identity theft and other crimes.