Fraud Prevention: Protecting Yourself from AI-Powered Scams

AI-powered tools are changing the world! Obviously, for the better. They are transforming many aspects of our lives, from helping to draft an email to giving recipes, helping us navigate fashion trends, and often resolving financial intricacies. They have become the core of our daily routine, making it easy and letting us enjoy ourselves while they take care of things for us.

But these best tech tools are slowly becoming exploitative tools for cybercriminals to carry out more convincing, complex, and harder-to-detect frauds. AI-powered fraud is no longer a concern for the future—it’s happening now. Understanding how these scams work and what you can do to protect yourself is essential.

 What is AI-Powered Fraud?

AI-powered fraud refers to scams and malicious activities where artificial intelligence is used to deceive, manipulate, or defraud individuals or organisations. Unlike traditional fraud, these schemes are often:

• Highly personalised
• Faster to execute
• Scalable
• Harder to detect with conventional tools

These scams leverage AI to clone voices, generate deepfake videos, automate phishing messages, and even mimic behavioural patterns to trick victims into handing over money or sensitive information.

 Common Types of AI-Powered Fraud

1. Voice Cloning Scams

AI can recreate someone’s voice with only a few seconds of audio without the person’s knowledge or consent, using deep learning algorithms to adapt the style of speaking, cadence, and speech patterns. Scammers use this to impersonate loved ones or colleagues, making urgent requests for money transfers or sensitive information. The emotional pressure can lead to quick decisions without verification, creating a false sense of emergency. 

A well-known example of voice cloning scams, the CEO Impersonation Scam, occurred in 2019. A UK-based energy company fell victim to a voice cloning scam in which fraudsters impersonated the voice of the company’s CEO. The scammer used AI technology to replicate the CEO’s voice and instructed a company employee to transfer €220,000 to a foreign bank account. Believing they were speaking to their CEO, the employee executed the transfer without hesitation.

2. Deepfake Impersonations

AI-generated videos and images that appear convincingly real can be used to:

• Mimic, a CEO, instructs a finance officer to wire funds.
• Impersonate public figures to spread false information or endorse fake products.

The purpose of deepfake impersonations in fraud is to deceive individuals, organisations, or the public by creating the illusion that a trusted person (such as a celebrity, CEO, or family member) is saying or doing something they did not actually say or do. For instance, in 2020, a deepfake video was circulated showing a politician allegedly making offensive comments about a particular group. Although the video was completely fabricated, it sparked controversy, leading to backlash and public distrust.

3. AI-Enhanced Phishing Attacks

AI-enhanced phishing attacks utilise artificial intelligence and machine learning to create personalised and sophisticated schemes. Their goal is to deceive individuals into revealing sensitive information such as login credentials, financial data, or personal identifiers. Here’s how it works: 

• Analyse your social media activity.
• Craft emails that sound exactly like your colleagues or bank.
• Avoid grammar mistakes, making them more believable.

A few common examples include AI-generated voices impersonating executives from the victim’s company. A phishing email might resemble a message from a company’s HR department about an urgent payroll update, or a chatbot could mimic a customer service agent for a bank or online retailer, asking the user to verify their account information. 

4. Automated Social Engineering

AI bots can engage in live chat or voice calls, responding intelligently and persuasively to lure victims into a trap. In contrast to traditional social engineering, which typically depends on human interaction and persuasion, automated social engineering utilises AI to generate and expand these deceptive interactions autonomously. AI tools adeptly imitate human-like conversations, formulate persuasive messages, and adapt based on responses to enhance future attacks, increasing their stealth and resistance against detection.

 Why AI Fraud is So Effective

• Personalisation: AI learns from data such as emails, posts, and voice recordings to tailor its scams.
• Speed: AI can automate thousands of scam attempts simultaneously.
• Low detection rate: Traditional spam filters and fraud detectors may not catch advanced AI-generated content.
• Exploits trust: Familiar voices or professional language reduce scepticism. 

 How to Protect Yourself from AI-Powered Fraud

1. Verify Independently

A fundamental step is to verify any financial or sensitive requests you receive, even if you find them genuine, as most scammers try to impersonate or replicate voices, emails, or messages from trusted individuals or loved ones, making it more complicated to identify the fraud.

For instance, when you receive urgent requests from a family member, colleague, or boss (for example, asking for money, passwords, or personal information), reach out to them directly using a reliable method. Call them using a known phone number or send a message through another secure platform. Avoid using the contact details in your received message, as they might be fraudulent.

2. Use a Family or Business Safe Word

How to implement it: Establish a unique code word or phrase with close family, business associates, or coworkers that only you would recognise. Utilise this safe word in unexpected or urgent situations to authenticate identity. For instance, asking, “What’s our pet’s name?” might suffice.

You can establish different ways to develop a unique code word or phrase with close family, business associates, or coworkers that only you would recognise immediately during unexpected or urgent situations to authenticate identity. Also, remember not to use common questions like “which car do we use?’ or “What’s our pet’s name?”, as it’s easy to dig out such information, use something personal and confidential. Consider changing the safecodes after a few uses.

3. Be Cautious with Personal Information Online

In the world of social media glamour, it’s easy to overshare personal information. Fraudsters can use this information to create a fake profile in your name or deceive other users.  AI systems can gather data from social media, websites, and other open sources to customise phishing or social engineering attacks.

To avoid victimising yourself to such cyber crimes, ensure that you share minimal personal data on social media and public platforms. Restrain from disclosing sensitive information such as your full name, address, workplace, vacation plans, or names of family members, as these details can be exploited in AI-driven scams, enhancing the credibility of the attacks.

4. Enable Multi-Factor Authentication (MFA)

Safety measures such as two-factor authentication or multi-factor authentication (MFA) should be used, which adds a crucial extra layer of security. So in cases where your login credentials are compromised, you can still stop it from letting them have unauthorised account access.

Activate MFA on every account that offers it, particularly for online banking, email, and social media platforms. This usually necessitates both something you know (like your password) and something you possess (such as a mobile device or authentication app) to log into your account. You can use Google’s or Bing’s built-in security layers for web logins, such as logging in using a code or mobile number.

5. Educate Your Circle

Always spread such information within your circle. While many individuals know how to use basic social media tools or the web, they might not know the dangers posed by AI-driven scams. Informing your family, friends, and colleagues can prevent them from becoming victims of these schemes.

Distribute information about the risks of AI-related fraud to those in your circle, particularly older adults, children, or anyone who might not be aware of current cybersecurity threats. Urge them to stay vigilant when confronted with unsolicited requests or unexpected communications. Remind them to verify any financial or personal inquiries through independent sources.

6. Use Strong Passwords and a Password Manager

Never use weak and common passwords, as they are prime targets for AI-driven brute-force or credential stuffing attacks. Using a password manager can really help you create strong, unique passwords and keep them safe! 

Start by creating complex passwords that combine letters, numbers, and symbols. Avoid easily guessable information such as names, birthdays, or common words. Consider using a password manager to effortlessly generate and securely store your passwords, so you don’t have to memorise each one!

7. Stay Informed

As AI technologies are evolving quickly, new forms of fraud are always popping up. Staying informed about the latest scams helps you spot potential risks before they take shape.

Stay connected with trustworthy sources for updates on cybersecurity and fraud prevention. Consider subscribing to cybersecurity blogs, following relevant social media accounts, and regularly checking for alerts from your financial institution or government agencies about new threats. It’s important to stay alert and aware of the latest trends in AI-driven fraud.

 What To Do If You Suspect an AI Scam

In cases where you suspect such instances, it can be a call or an email, you must follow the steps below: 

• Stop All Communication:

Disengage immediately! Stop communication as soon as you identify the scam. Do not click on any links and never share any personal information such as passwords, one-time passwords, or codes.

• Report the Incident:

Please report any incidents as soon as they occur. It’s important to get in touch with the authorities and share all relevant details with them. 

• In the UK: Report to Action Fraud (actionfraud.police.uk)
• In the US: File a complaint with the Federal Trade Commission (ftc.gov)
  
• Contact Your Bank:

In case of financial information theft, connect with your banking facilities immediately to freeze transactions, cancel or suspend credit cards, and notify them of potential fraud.

• Change All Compromised Credentials: 

To enhance account security, regularly update your passwords and security questions. Create strong, hard-to-guess passwords and select security questions only you can answer. This protects your personal information and keeps your accounts safe from unauthorised access.

• Monitor Your Accounts:

Monitor financial activities for suspicious transactions and report findings to authorities immediately. Timely reporting prevents fraud and protects our financial integrity.

 The Role of Businesses and Financial Institutions

Financial service providers and digital platforms must also step up by:

• Integrating AI-powered fraud detection systems.
  
• Providing real-time alerts for suspicious activity.
  
• Offering clear and fast reporting procedures for potential victims.
  
• Conducting regular awareness campaigns.
  

Final Thoughts

AI is a powerful tool, but it becomes a dangerous weapon in the wrong hands. As scammers become more sophisticated, so must we. By staying vigilant, verifying communications, and adopting smart digital habits, you can protect yourself and those around you from falling victim to AI-powered fraud.

Stay alert. Stay informed. Stay protected.