Scams and AI: the new fraud frontier

As artificial intelligence becomes increasingly integrated into our daily lives, it's not just tech enthusiasts and businesses taking notice — scammers are too. AI scams are becoming a significant threat, using advanced technologies to deceive individuals and institutions. Read on to learn how scammers use AI, and what you can do to protect yourself. 

What’s an AI scam?

An AI scam uses artificial intelligence tools to deceive people into believing that communications are legitimate. "While artificial intelligence has been around for decades, in the past few years, it has become widely available, and of course, scammers were quick to jump on it," explains Tom Keenan, a leading cybersecurity expert and professor at the University of Calgary. "Essentially, they ... create fake content to attempt to fool people and ultimately take their money."

The scams include everything from AI-powered phishing emails to deepfake technology that can convincingly impersonate voices or create videos of trusted figures. The key danger lies in the sophistication of these AI-generated deceptions, making them hard to detect and more likely to succeed.

Common types of AI scams

To better understand the threats, let’s explore some of the most common types of AI scams:

AI-powered phishing

AI enhances phishing attempts by generating highly convincing emails or messages mimicking official communications from banks or other trusted institutions. These scams trick recipients into providing sensitive information, such as login credentials or financial details.

Deepfake technology

Scammers use AI to create realistic voice or video recordings to impersonate trusted family members, government officials, or even executives from your company. 

Fraudsters are now using AI voice cloning to make scams even more convincing. With just a few seconds of audio, these tools can replicate the voices of loved ones, tricking victims into believing they’re speaking with family members in distress. For example, an elderly Manitoba woman was tricked into handing over thousands of dollars to criminals after they convinced her that her grandson had been involved in a car accident. These so-called grandparent scams exploit people using fear to create a sense of urgency.

Chatbots and automated calls

Scammers also use AI-driven chatbots and automated voice systems to impersonate customer service agents. These bots engage in conversation and attempt to extract personal or financial information from unsuspecting victims. Always verify such communications through official channels (by calling the company using the contact information you know to be true) before providing any information.

Common signs of AI scams

So, how can you identify potential AI scams? Here are some key red flags to watch out for:

🚩 Unexpected communication: Be cautious of phone calls, emails, or SMS messages—especially if you weren't expecting them. "Any incoming communication should be regarded as suspicious," warns Keenan.

🚩 Urgency: Scammers often create a sense of urgency and will pressure you to act quickly. If someone pushes you to make an immediate decision, it's a major red flag.

🚩 Secrecy: Be suspicious if the caller instructs you not to tell anyone about the conversation, especially under the guise of "catching a criminal."

🚩 Request for personal information: Watch out for any requests for personal information. It's unusual that you would receive these kinds of requests from a trusted institution or person you know, and it could be an attempt to gain access to your accounts.

🚩 Unsolicited access codes: If you receive an access code you didn't request, immediately change your password and monitor the account closely.

Best practices for protecting yourself

Protecting your bank account from AI-driven scams requires vigilance.

"The best practice is avoiding doing whatever the caller or message sender asks you to do. Instead, say, 'I'll call you back,' and hang up. Then, wait a few minutes and call the supposed caller—whether it's your boss, your bank, or a company like Amazon—at a phone number or email address that you know is correct," recommends Keenan.

It's also essential to watch for red flags, such as audio glitches or inconsistencies in a video, which may indicate the use of deepfake technology. Fraudsters may also pressure you to send money, often requesting untraceable forms of payment like cryptocurrency or gift cards, which are big red flags. "Never send money, especially through these methods," advises Keenan.

Additionally, be cautious about what personal information you post online, as scammers can use publicly available details to make their deceptions more convincing. "Just because the caller knows something like your account number or date of birth, you should still be suspicious," Keenan says. Establishing a code word with family and close friends is another critical safeguard. Use it to verify their identity in any emergency calls or messages to ensure you're really speaking to them.

By implementing these simple strategies, you can protect yourself and your loved ones from falling victim to AI-driven scams.

Tips to safeguard your financial information

Here are three actionable tips to implement immediately to protect your accounts from AI scams:

✅ Enable two-step authentication: Add two-step authentication (also called multi-factor authentication) to all your accounts. If a vendor doesn't offer that level of security, you might consider dealing with a different one.

✅ Educate people in your network: Educate your family, friends, and coworkers to be highly suspicious of unexpected incoming communications. For example, warn them not to give out private information when they receive an incoming phone call about a supposed Amazon purchase made on their account.

✅ Use verbal passcodes: Create verbal passcodes with family members and associates. If you get a voice call from them that seems suspicious, you can challenge the caller to provide this answer.

What to do if you suspect a scam

If you suspect an AI scam has targeted you, acting quickly is crucial. Report any suspicious activity to your bank immediately and monitor your accounts closely for any unauthorized transactions. Prompt action can prevent further damage and help authorities track down the perpetrators.

AI scams represent a new frontier in financial fraud and can deceive even the most cautious individuals. However, by staying informed, recognizing red flags, and implementing best practices, you can safeguard your accounts against these threats. As AI continues to evolve, so must our vigilance in protecting ourselves and our loved ones from those using this technology for malicious purposes.

Read up on the latest scams and tips for staying safe at Tangerine's Security Centre.