AI deep fakes, identity theft, and fraudulent charity schemes rank among the primary scams targeting individuals and businesses in 2024, as per a recent report by Experian, a credit reporting agency.
The surge in deceptive deepfake content, spanning emails, voice, video, and sham websites, is notably fueled by generative AI technology. Deepfakes, which involve digitally altering media to substitute one person’s likeness with another’s, are becoming increasingly prevalent.
A significant portion of Americans, over 65%, admit encountering manipulated videos and images designed to deceive them.
The rise of deepfakes has enabled scammers to adopt a DIY approach to fraud, rendering both consumers and businesses more susceptible to attacks, as highlighted in Experian’s 2024 Future of Fraud forecast.
Key insights from the report include:
- Close to 70% of businesses have observed an uptick in fraud-related losses in recent years.
- More than half of consumers feel they are now more prone to fraud targeting compared to a year ago.
Experian recommends vigilance against the following five fraud threats anticipated in 2024:
1. AI-related scams, encompassing deep fakes and identity theft
While generative AI has delivered various advantages across sectors, it has also democratized fraud, endangering consumers and businesses. In addition to the proliferation of deepfake content, fraudsters might leverage AI to orchestrate “proof of life” scams, tricking individuals into financial losses. By utilizing stolen identities, scammers can fabricate fictitious online personas and engage with unsuspecting consumers through these seemingly authentic profiles.
2. Weakened fraud safeguards at brick-and-mortar banks
Despite the significant shift towards digital banking, many consumers have reverted to in-person visits to credit unions and bank branches for account openings or financial guidance, seeking a sense of security and sidestepping online security threats. However, the verification checks conducted by banks are currently plagued with issues, such as human errors, as most institutions do not employ biometric authentication.
According to Experian, 85% of consumers consider physical biometrics the most reliable and secure authentication method they have encountered recently. Nevertheless, only 32% of businesses utilize physical biometrics for fraud detection and prevention.
Experian foresees a pressing need for bank branches to enhance the adoption of biometrics for verifying new customers’ identities throughout the year.
3. Escalating retail fraud, with a focus on fraudulent returns
The upsurge in online shopping has provided fraudsters with opportunities to defraud retailers and small businesses creatively. For instance, a customer purchases an item like a pair of pants and later returns an empty box, claiming the product was lost in transit. This leaves the business at a loss, both in terms of goods and revenue.
4. Synthetic identity fraud
Amid the pandemic, many fraudsters established synthetic identities. Although dormant in recent years, these accounts can now be exploited by fraudsters to siphon funds illicitly.
5. Proliferation of fake GoFundMe and charity scams
Fraudulent GoFundMe campaigns, social media giveaways, charity fundraisers, and investment schemes that seem too good to be true are frequently utilized to extract personal information from consumers. Experian anticipates a surge in these deceitful tactics designed to evoke emotional responses in 2024 and beyond.
Kathleen Peters, the Chief Innovation Officer at Experian Decision Analytics in North America, warns about the escalating speed and sophistication of fraud attacks in 2024, emphasizing the critical need for businesses to adopt advanced technology-driven identity verification and fraud prevention strategies.
For further insights on Experian’s fraud prevention recommendations, please refer to Experian’s website.
