Businesses and consumers have been urged out for five new types of fraud enabled by the weaponization of new technology including generative artificial intelligence.
The credit reference agency Experian has released an urgent alert about the emerging threats consumers and businesses should “be cautious of this year”.
It warned that fraudsters are becoming increasingly sophisticated and are using the latest technology to target victims, including Gen AI such as the large language model ChatGPT.
An Experian survey found that 70% of businesses report that fraud losses have increased in recent years. More than half of consumers also fear they’re “more of a fraud target than a year ago”.
To tackle the rising threat of fraud, businesses are urged to deploy sophisticated fraud protection solutions that “harness the power of data and technology to mitigate risk and protect consumers”.
“The speed and complexity of fraud attacks due to new technology and sophisticated fraudsters is leaving both businesses and consumers at risk in 2024,” said Kathleen Peters, chief innovation officer at Experian Decision Analytics in North America.
“At Experian, we’re constantly innovating to deliver data-driven solutions to help our customers fight fraud and to protect the consumers they serve. Now more than ever, businesses need to implement a multilayered approach to their identity verification and fraud prevention strategies that leverages the latest technology available.”
Watch out for these five fraud threats in 2024:
Generative AI fraud: The “explosive popularity” of generative AI is driving a huge rise in DIY fraud. Criminals are using AI to generate code which allows them to set up scam websites and launch attacks. They are also generating deepfake content, such as emails, voice, and video.
Additionally, fraudsters can use generative AI to create socially engineered “proof of life” schemes and leverage generative AI to create fake identities on social media.
To tackle this emerging threat, companies should utilize multilayered fraud prevention solutions that “fight AI with AI”, Experian advised.
Bank branches bite back: The story of financial services in the 21st century has been about migration to digital experiences. However, consumers are still to bank branches to open new accounts or get financial advice in the belief that in-person interaction is safer and avoids online security risks.
Yet human error could lead to mistakes with identification. Experian found that 85% of consumers feel that physical biometrics is the most trusted and secure authentication method. Unfortunately, just 32% of businesses gave deployed it to detect and protect against fraud.
Experian forecasts that lenders will introduce more digital identity verification steps including physical biometrics at branches to protect legitimate customers and mitigate losses during in-person interactions.
Empty returns: This low-tech scam involves buying an item from an online retailer and then requesting a return, before sending back an empty box and claiming the item was stolen. Experian predicts that more criminals will use this method throughout 2024, leaving businesses with lost goods and a dent in revenue.
Synthetic identity fraud: During the pandemic, fraudsters created synthetic identities to steal funds by applying for financial aid programs. These synthetic identities now have a few years of history, making them look more authentic. It is feared these relatively old fake accounts will be harder to detect and allow fraudsters to “bust out” and steal funds over the next year. To tackle this threat, businesses will need to collaborate with fraud-prevention partners to review current portfolios for synthetic identity accounts.
Cause-related and investment deception: Fraudsters are pulling the heart strings of their victims using fake GoFundMe campaigns, social media giveaways, investment opportunities and text fraud. These “strike an emotional response” with “cause-related asks or too-good-to-be-real offers to gain access to consumers’ vital, personal information”
To avoid falling victim, consumers must confirms texts or other communications are from a genuine charity or third-party.
Get in touch with [email protected] if you’ve been scammed or want to issue a fraud warning
