AI: The Next Frontier for Fraudsters 

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GUEST BLOGGER

Anuj Choudhary, CFE

Artificial intelligence (AI) is rapidly changing the world, and India is no exception. AI is being used in a variety of industries, including finance, healthcare and retail. It is also being used to create new forms of fraud, which are becoming more sophisticated and difficult to detect. 

AI has the potential to disrupt markets in a number of ways. For example, AI can be used to automate tasks, which can lead to increased efficiency and productivity. The technology can also be used to personalize customer experiences, which can lead to increased customer satisfaction. However, AI also has the potential to be used for fraudulent purposes. For example, AI can be used to create fake identities, generate fake documents and even hack into computer systems. This makes it much easier for fraudsters to steal money and personal information. Also, AI can be used to create deepfakes — videos or audio recordings that have been manipulated to make it look or sound like someone is saying or doing something they never said or did — which can damage someone's reputation or be used to spread misinformation. 

It is important to use AI responsibly and to mitigate the risks of AI-enabled fraud. There are a number of steps that can be taken to ensure responsible AI use and fraud prevention, including: 

  • Developing regulatory frameworks and guidelines for AI. 

  • Addressing ethical considerations and responsible AI practices. 

  • Strengthening cybersecurity measures and data protection. 

  • Investing in fraud detection and prevention mechanisms. 

The evolving landscape of fraud is being shaped by the increasing adoption of AI technologies. Fraudsters are using AI to automate tasks, target victims more effectively and evade detection. This is presenting a wide range of challenges for law enforcement and regulatory bodies.   

Case Studies of AI-Driven Fraud 

Scammers Use AI to Clone Government Officials' Voices 

In May 2023, a group of Indian scammers used AI to clone the voices of government officials and call unsuspecting citizens. They claimed to be from the government and asked for money or personal information. The scammers defrauded more than 45 people of INR 50,000. One victim became suspicious and reported the call to the police who were able to track down and arrest the scammers. 

  • Do not give out personal information to anyone you do not know and trust. 

  • If you receive a call from someone claiming to be from a government agency, hang up and call the agency directly to verify the call. 

  • Be suspicious of any calls that ask for money or personal information. 

  • Use a call blocking service to block calls from known scam numbers. 

Scammers Use Deepfake Technology to Steal Money 

In May 2023, Scammers in China used deepfake technology to create videos of a government official asking people to transfer money to a specific bank account. The videos were so realistic that many people were fooled, and they ended up transferring a total of USD 622,000 to the scammers. The fraud was caught when one of the victims became suspicious and reported it to the police. 

  • Be suspicious of any videos or audio recordings that seem too good to be true. 

  • Do not click on links in emails or messages from people you do not know. 

  • Only transfer money to people and organizations that you trust. 

  • Use a security solution that can detect and block phishing scams. 

AI is being used to create new forms of fraud that are more difficult to detect, which fraudsters are utilizing to disrupt markets around the world. The evolving landscape of fraud is being shaped by the increasing adoption of AI technologies, and real-world case studies show that AI-driven fraud is now a real threat. Through a proactive approach to raise awareness and education as AI continues

Bio about Anuj: 

Anuj is an experienced professional with experience in the forensics and risk space. He has worked on various high-profile and complex projects. He possesses exceptional skills and has previously served as a Manager with GT and EY in the Forensics Space currently he is working with Dr. Reddy Laboratories as a Corporate Compliance Manager. Anuj is a Certified Fraud Examiner (CFE), Certified Information Systems Auditor (CISA), Certified Information Security Manager (CISM), and Forensic Accounting and Fraud Examination (West Virginia University), among others. He is also a qualified Chartered Accountant (CA). He is a frequent contributor to industry publications, with articles published on ACFE Insights, ACFE Newsletter and ISACA NOW.