With the Halloween season upon us, the most chilling threats aren't found in haunted houses, but lurking in your inbox and on your phone. Financial fraud is getting more sophisticated and expensive, and the rise of Artificial Intelligence (AI) is providing scammers with tools far scarier than any ghost: the ability to mimic human communication and steal identities. 

Experts are sounding the alarm about highly destructive schemes, such as the "phantom hacker" scam warned about by the Federal Bureau of Investigation (FBI), which has already drained over $1 billion from seniors' retirement accounts. This new level of deception, supercharged by AI technology, makes scams harder to detect. Experts suggest that 73% of Americans will likely face a fraud attempt at some point.

The underlying goal of scammers—obtaining your personal information or money—remains the same, but generative AI, which creates text, images, or videos, dramatically enhances their ability to deceive victims.

Identifying AI scam threats

Scammers are using AI tools to impersonate trusted individuals and organizations, often twisting time-proven schemes:

1. Voice cloning and deepfakes: Imagine getting a call that sounds exactly like a friend or relative claiming they need money quickly for bail or a ransom. AI tools can clone a voice from a short audio clip and use it in these imposter scams. These voice cloning scams are often targeted at older victims in what are known as "grandparent scams". Similarly, deepfake videos—AI-generated videos of completely fake or simulated real people—are used to promote fraudulent products or investment scams on social media. Scammers may even use AI to create real-time deepfake videos for video calls, making romance scams more convincing.
2. Enhanced phishing and smishing: AI helps scammers write more convincing and natural-sounding phishing emails or text messages (smishing). Where older phishing attempts often contained obvious errors, AI-enhanced messages are becoming more polished and personalized based on information scammers find about the victim online.
3. AI-generated visuals and websites: AI is employed to quickly generate eye-catching images for social media ads, fake identification documents, or fake headshots for social media profiles. Scammers may also use AI to create entirely fake websites, such as fraudulent e-commerce stores offering deeply discounted items, designed to steal payment information quickly. These sites might be part of a limited-time sale to prompt fast purchases.
    

Avoiding AI scams

Protecting yourself requires combining foundational security practices with extreme skepticism.

1. Embrace skepticism and pause: If something doesn't feel right or seems too good to be true, it probably is. Scammers often rely on urgency, pressuring victims to act quickly, sometimes within less than an hour, threatening fines or missed opportunities. Do not take any action if you feel pressured; in most legitimate situations, pausing for a couple of hours or days is acceptable.
2. Verify through trusted channels: If you receive a suspicious call or message, stop the exchange and reach out using a separate, well-known channel. Hang up and look up the organization or person’s contact information independently. To verify family members in the face of deepfakes and voice cloning, you can create a secret password or phrase that only your family knows to confirm identities over the phone. The personal relationships and verification are key to balancing out and saving us long term from deepfakes.
3. Strengthen account security: Create unique passwords for all your online accounts, including banking and retail sites. Enable multifactor authentication (MFA) wherever possible, ideally using a non-SMS version to protect against SIM swapping. Regularly updating your passwords is also crucial.
4. Exercise payment caution: Avoid giving out any personal information over the phone. Scammers frequently request payment via methods that are difficult to trace or cancel, such as cash, wire transfers, gift cards, or cryptocurrency. Paying with a credit card may help limit losses, as you might be able to dispute the charge. Additionally, never refund or forward overpayments, as the original payment is often fraudulent and will be taken back later.

If you are a victim of a scam, quickly contact the company involved to try and stop or reverse the transaction. You should also report the fraud to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov. To mitigate identity theft risks, update your passwords and consider placing fraud alerts or security freezes on your credit reports. Monitoring your credit for unexpected changes can help you quickly detect and respond to signs of identity theft.

Did you know that all AAA Members get powerful identity theft protection from ProtectMyID® by Experian? Start using your ProtectMyID® tools today.

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