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The holidays are a bonanza for scammers preying on people eager for deals. Now artificial intelligence is creating more sophisticated traps and targeting vastly more victims.
Visa said the number of charges on its credit-card network blocked for potential fraud on Black Friday and Cyber Monday surged 200% globally from last year. The increase was driven by scammers using AI. Mastercard said it blocked nine times the amount of fraud attempts between Thanksgiving and Cyber Monday from a year ago.
“It is absolutely a golden age for fraud and fraudsters,” said Michael Jabbara, global head of fraud services at Visa.
U.S. shoppers have lost $8.7 billion to fraud overall through this year’s third quarter, a 14.5% increase from the same period a year ago, according to the Federal Trade Commission.
Fraudsters are deploying AI to more efficiently perform a variety of tasks, according to Katalin Parti, a cybercrime researcher at Virginia Tech. That includes blasting out text messages to bait victims and writing programming to test huge volumes of stolen credit card information, she said.
AI is also helping scammers generate more fake online ads and shopping sites that entice people to share credit-card information. Michael Maestranzi was duped by such a scam after clicking on an ad for an advent calendar based on a children’s game his 10-year-old son loves.
“It’s Christmastime so I’m constantly thinking about my three kids and what to get them,” said Maestranzi, a 46-year-old resident of Nutley, N.J.
The ad took him to what looked like a Macy’s webpage, where the calender was listed for half its normal price at $39.97. A countdown showed they were rapidly selling out. It was only after his second attempt at the purchase went through that he realized he was never asked for an email address for shipping confirmation.
“Then I knew I got scammed,” he said.
Scammers are also using AI to impersonate account holders. The technology was used in 25% of cases of scammers trying to falsely verify identities and gain access to accounts, according to Plaid, a fintech startup that lets customers give companies permission to connect with their banking accounts.
AI is being used to generate fake driver’s licenses or passports—or even deepfake videos in cases when account holders are asked to send selfie videos to verify identities, according to Plaid. Companies that use the so-called liveness checks include crypto exchange Coinbase and trading platform Robinhood.
