6 Financial Scams In The Age Of AI (And How To Protect Yourself)

Artificial Intelligence (AI) has woven itself into the fabric of our daily lives. From personalized recommendations on streaming services to instant summaries of lengthy emails, AI-driven tools are making everyday processes faster and more efficient. However, as AI capabilities have grown, so too have the opportunities for bad actors to exploit these technologies for fraudulent activities.

AI-driven scams can lead to devastating financial and emotional harm, particularly for retirees and those on fixed incomes. Recognizing the signs of a scam could be the difference between a quick recovery and the loss of hard-earned savings. This post aims to highlight prevalent AI-based scams, and offer practical tips to help you protect yourself and your loved ones financially.

Some Statistics You Should Know

Nearly Half of Fraud Attempts Are Involving AI: According to a 2024 industry report, nearly half (42.5%) of all fraud attempts in the financial and payments involved AI.¹

Soaring financial losses predicted due to AI fraud: Experts also predict that financial losses tied to AI-driven scams will grow at an alarming rate. Deloitte’s Center for Financial Services estimates that U.S. fraud losses, which totaled around $12.3 billion in 2023, could soar to $40 billion by 2027—a compound annual growth of about 32%. Without adequate safeguards, AI-driven scams could more than triple the amount of money stolen in just a few years​.²

Rising AI Deepfake Fraud Rates: Deepfake-based scams are also increasing rapidly. Global incidents involving AI-generated deepfakes saw a dramatic spike between 2022 and 2023, with North America alone experiencing a staggering 1,740% increase.³

1) Phishing Scams

Phishing methods are evolving as cybercriminals leverage AI to create messages that look remarkably authentic. This shift raises the stakes, making it easier for unsuspecting users to fall victim to deceptive emails and websites.

Real-Life Example

Recently, cybercriminals began using generative AI tools to craft extremely convincing phishing emails. One scheme involved fraudsters impersonating real vendors and emailing company accountants with urgent fake invoices and payment instructions. Several fintech startup employees fell for these AI-authored emails and wired hundreds of thousands of dollars to accounts controlled by the scammers​.⁴

What the Scam Looks Like

• Scam emails often mimic the tone and writing style of someone you know or trust.
• Criminals may include hyper-personalized details such as your job title, workplace projects, or recent activities to make the message seem authentic.
• The message frequently includes urgent requests to click a link or provide sensitive information.

Red Flags

• Unexpected Attachments: Attachments you didn’t anticipate from a sender can often indicate a phishing attempt.
• Suspicious Sender Domain: Email addresses that look similar but have slight variations (e.g., “yourcompany.co” instead of “yourcompany.com”) suggest something is off.
• Threatening or Urgent Language: Warnings of dire consequences if you do not act immediately usually signal a scam.

How to Protect Yourself

• Confirm via Secondary Channel: Always call or message the sender using a known contact method if you are unsure.
• Hover Over Links: Make sure the URL leads to a legitimate site before you click.
• Use Anti-Phishing Tools: Ensure your email provider’s spam and phishing filters are active and updated.

Please Note: If you suspect your email is compromised, you may want to promptly switch to a strong new password, enable two-factor authentication (2FA) for extra protection, check your account activity, and log out of all sessions. Scan your device with reputable antivirus software, apply security updates, and warn your contacts to be cautious of any suspicious messages.

2) Deepfake Voice and Video Scams

Deepfake technology is advancing at a rapid pace, enabling fraudsters to mimic voices and faces with uncanny accuracy. As these synthetic media become harder to detect, they open up new avenues for deception and manipulation.

Real-Life Example

In 2024, someone in Los Angeles answered a call from a voice so disturbingly similar to a relative’s that they were convinced it was a genuine cry for help. Scammers had employed AI-based voice cloning to mimic the loved one’s voice, requesting urgent financial help. Believing the emergency was real, the victim followed the instructions of a supposed “lawyer” and handed over $25,000 to be delivered in cash​.⁵

What the Scam Looks Like

• Fraudsters use AI-generated audio or video that convincingly recreates a person’s voice or face.
• They often request immediate transfers or confidential data, framing the situation as a critical emergency.

Red Flags

• Unusual Urgency or Secrecy: Scammers pressure you to act quickly or not discuss the situation with anyone else.
• Subtle Glitches: Slight delays in facial movements or odd voice intonations can indicate synthetic media.
• Refusal to Use Official Channels: Individuals who insist on communicating through unfamiliar accounts are suspect. Scammers may attempt to sway you from going to a place in person as well.

How to Protect Yourself

• Implement Verification Steps: Use pre-arranged code words or require a second signature for large fund transfers.
• Restrict Public Content: Limit the amount of video or audio of high-profile individuals you share online.
• Use Multi-Factor Confirmation: Confirm requests using official phone numbers or secure video conferencing.

3) Text Message (SMS) Scams

AI-driven algorithms now power text messaging schemes that adapt their style and language to appear more legitimate. By targeting users on their personal devices, scammers capitalize on the immediacy of text communication.

Real-Life Example

In 2024, a credit union experienced a scam in which members received alarming text messages about suspicious account activity. The messages looked legitimate, warning recipients about unauthorized logins and encouraging them to click a link. The scammers had used advanced AI to mimic official language, reducing obvious grammatical errors and making the fraud appear more credible.⁶

What the Scam Looks Like

• Scammers send text alerts claiming your account has been locked, compromised, or is on the verge of suspension.
• They often link to websites that closely resemble your financial institution’s legitimate login page

Red Flags

• Generic Greetings: Messages that do not match your bank’s usual style or address you incorrectly can signal fraud.
• Overly Formal or Stilted Language: AI-generated texts can sound unnaturally perfect or slightly off to a native speaker.
• Threatening Deadlines: Claims like “48 hours to fix” or “Your account will be closed” are common scare tactics.
• Grammatical Errors: Although AI can make this less common, any grammatical mistakes can signal a scam.

How to Protect Yourself

• Never Click Links in Random Texts: Especially if the text uses fear tactics or appears out of the blue.
• Contact Your Bank Directly: Always use the genuine contact number printed on your credit or debit card, or visit the institution’s verified website to find their official phone line.
• Enable Two-Factor Authentication: Fortify your online banking by requiring a secondary method of verification in addition to your password.

4) Synthetic Identity Fraud

Criminals now harness advanced generative AI to piece together real and fabricated personal details, forging convincing “synthetic” identities. By seamlessly blending stolen data with artificial elements, they can open accounts, secure loans, and evade detection.

Real-Life Example

In 2023, authorities uncovered a nationwide operation where criminals combined stolen personal data with fabricated names and credit histories to create more than 20 fake identities. These synthetic personas were used to open accounts and secure loans, resulting in losses exceeding $1 million. Many stolen Social Security numbers belonged to individuals unlikely to monitor their credit regularly (e.g. children, new immigrants, etc.), allowing the fraud to remain undetected.⁷

What the Scam Looks Like

• Criminals piece together partial or full personal details, such as Social Security numbers and birth dates, with invented data to create new identities.
• They leverage these fake identities to set up financial accounts, secure credit cards, or request loans without triggering red flags.

Red Flags

• Unexpected Credit Inquiries: Credit checks from lenders you never contacted could mean someone is using your identity.
• Unusual Mail: Receiving bills or statements for unknown credit cards or loans at your address may indicate fraudulent activity.

How to Protect Yourself

• Monitor Your Credit Reports: Regularly review reports from all major bureaus for unusual activity.
• Set Fraud Alerts or Credit Freezes: Make it more difficult for scammers to open accounts under your name.
• Use Identity Theft Protection Services: Benefit from real-time alerts and faster response to suspicious activity.

5) Tech Support Scams

Fraudsters are using artificial intelligence to pass themselves off as legitimate tech support personnel, manipulating unsuspecting users into handing over remote access or sensitive information. These impersonations exploit fear and confusion, making it harder for users to recognize the ruse.

Real-Life Example

In 2024, an individual in Winnipeg sought help with transferring a social media account to a new phone and found a suspicious customer support number online. Before calling, the individual relied on an AI assistant to verify the number, which mistakenly confirmed it was legitimate. The victim then contacted the scammers posing as tech support, granting them account access and losing funds to fraudulent purchases.⁸

What the Scam Looks Like

• You may receive unsolicited pop-ups or phone calls claiming your device is compromised.
• Scammers pose as official tech support representatives, urging you to grant remote access or pay fees.
• They may rely on AI-verified or fabricated contact details to appear authentic.

Red Flags

• High-Pressure Tactics: Rushing individuals into quick action under the guise of preventing data loss or security breaches is a common manipulation tactic.
• Requests for Financial Details: Asking for credit card or bank information during initial contact is a major warning sign.
• Suspicious Website Pop-Ups: Poorly designed or typo-ridden pop-ups with unusual URLs indicate a scam.

How to Protect Yourself

• Never Give Remote Access Unless You Initiated the Call: Genuine tech support rarely makes unsolicited contact.
• Go Directly to Official Sites: If you suspect an issue, use the company’s verified website or known support channel.
• Keep Software Updated: Maintaining reputable antivirus programs and installing updates reduces your vulnerability.

6) Social Media and Dating App Chatbot Scams

AI-powered chatbots are infiltrating social platforms, carrying on realistic conversations and building trust with unsuspecting users. By imitating genuine human interaction, they lure individuals into risky clicks and fraudulent transactions.

Real-Life Example

In late 2023, an Illinois man was duped by an AI-generated romance scam on social media. He received an unexpected text and soon was chatting with a person claiming to be a young woman. Scammers used AI-enhanced profile photos and videos – experts noted the images had unnatural, filtered features – to convince him that he was talking to a real person​. Over time, the “woman” professed love and urged the man to invest in a special stock opportunity. Swayed by the personal connection, he sent about $60,000 to what he thought was a legitimate investment account – only to later find it was a fraud and the money was gone​.⁹ 

What the Scam Looks Like

• Scammers deploy AI chatbots on social media or dating platforms to maintain realistic, human-like conversations.
• They gradually earn the other party’s confidence and, down the line, solicit funds, investments, or private information.

Red Flags

• Rapid Escalation of Intimacy: Jumping quickly from casual conversation to personal or emotional topics is suspicious.
• Inconsistent Details: Contradictions in backstories or timelines can reveal a fabricated identity.
• Requests for Money or Investments: Urging financial commitments for risky or unverified “opportunities” is a strong warning sign.

How to Protect Yourself

• Verify Identity: Use video calls, reverse image searches, or check social media profiles for consistency.
• Guard Personal Details: Limit the information you share early in an online relationship.
• Stay Skeptical: Exercise caution if someone you have never met encourages large financial transactions.

We Can Help You Further

AI-driven scams can be incredibly convincing, using authentic-sounding voices, writing styles, or chat responses to trick people into divulging personal information or transferring money. Grasping these risks and spotting typical warning signs marks the initial move toward protecting yourself.

Establish strong security protocols—such as two-factor authentication, strict transaction verification processes, and regular credit monitoring. These defensive measures help you spot suspicious activities early and minimize the damage if a scammer attempts to compromise your accounts.

A reliable financial advisor can help you develop strategies to protect your wealth, whether it’s implementing fraud alerts, choosing reputable investment platforms, or planning for unexpected financial challenges. Use the button below to schedule a complimentary consultation with our team today!

References:

1. https://www.signicat.com/press-releases/42-5-of-fraud-attempts-are-now-ai-driven-financial-institutions-rushing-to-strengthen-defences#:~:text=New%20data%20from%20the%202024,those%20attempts%20are%20considered%20successful
2. https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-predictions/2024/deepfake-banking-fraud-risk-on-the-rise.html
3. https://www.security.org/resources/deepfake-statistics/
4. https://www.forbesafrica.com/daily-cover-story/2023/09/19/how-ai-is-supercharging-financial-fraud-and-making-it-harder-to-spot/
5. https://abc7chicago.com/post/scammers-use-voice-cloning-artificial-intelligence-ai-swindle-man-25k-los-angeles-police-talk-how-avoid/15441538/#:~:text=Este%20art%C3%ADculo%20se%20ofrece%20en,Espa%C3%B1ol
6. https://www.roguecu.org/community/learn/fraud-prevention/scams-in-the-age-of-artificial-intelligence
7. https://tbrnewsmedia.com/tag/financial-crime/#:~:text=In%20what%E2%80%99s%20called%20a%20synthetic,card%20accounts%20from%20financial%20institutions
8. https://www.cbc.ca/news/canada/manitoba/facebook-customer-support-scam-1.7219581#:~:text=WATCH%20%7C%20How%20Gaudreau%20got%20caught%20in%20the%20scam%3A&text=Winnipeg’s%20Dave%20Gaudreau%20called%20a,and%20locked%20his%20bank%20accounts
9. https://abc7ny.com/ai-character-generator-photo-enhancer-romance-scam-dating-apps/14070758/#:~:text=He%20was%20convinced%20to%20send,Experts%20say%20it%27s%20a%20scam