(Bloomberg Markets) — Computer-generated children’s voices so realistic they fool their own parents. Masks created with photos from social media that can penetrate a system protected by face ID. They sound like the stuff of science fiction, but these techniques are already available to criminals preying on everyday consumers.Most Read from BloombergWagner Chief Prigozhin Listed Aboard Crashed Jet, Reports SayHuawei Building Secret Network for Chips, Trade Group WarnsWagner Chief Prigozhin Was i
Deepfake Imposter Scams Are Driving a New Wave of Fraud
Computer-generated children’s voices so realistic they fool their own parents. Masks created with photos from social media that can penetrate a system protected by face ID. They sound like the stuff of science fiction, but these techniques are already available to criminals preying on everyday consumers.
The proliferation of scam tech has alarmed regulators, police and people at the highest levels of the financial industry. Artificial intelligence in particular is being used to “turbocharge” fraud, US Federal Trade Commission Chair Lina Khan warned in June, calling for increased vigilance from law enforcement.
Even before AI broke loose and became available to anyone with an internet connection, the world was struggling to contain an explosion in financial fraud. In the US alone, consumers lost almost $8.8 billion last year, up 44% from 2021, despite record investment in detection and prevention. Financial crime experts at major banks, including Wells Fargo & Co. and Deutsche Bank AG, say the fraud boom on the horizon is one of the biggest threats facing their industry. On top of paying the cost of fighting scams, the financial industry risks losing the faith of burned customers. “It’s an arms race,” says James Roberts, who heads up fraud management at Commonwealth Bank of Australia, the country’s biggest bank. “It would be a stretch to say that we’re winning.”
The AI explosion offers not only new tools but also the potential for life-changing financial loss. And the increased sophistication and novelty of the technology mean that everyone, not just the credulous, is a potential victim. Covid-19 lockdowns accelerated the adoption of online banking around the world, with phones and laptops replacing face-to-face interactions at bank branches. It’s brought advantages in lower costs and increased speed for financial firms and their customers, as well as openings for scammers.
Some of the new techniques go beyond what current off-the-shelf technology can do, and it’s not always easy to tell when you’re dealing with a garden-variety fraudster or a nation-state actor. “We are starting to see much more sophistication with respect to cybercrime,” says Amy Hogan-Burney, general manager of cybersecurity policy and protection at Microsoft Corp.
Globally, cybercrime costs, including scams, are set to hit $8 trillion this year, outstripping the economic output of Japan, the world’s third-largest economy. By 2025 it will reach $10.5 trillion, after more than tripling in a decade, according to researcher Cybersecurity Ventures.
In the Sydney suburb of Redfern, some of Roberts’ team of more than 500 spend their days eavesdropping on cons to hear firsthand how AI is reshaping their battle. A fake request for money from a loved one isn’t new. But now parents get calls that clone their child’s voice with AI to sound indistinguishable from the real thing. These tricks, known as social engineering scams, tend to have the highest hit rates and generate some of the quickest returns for fraudsters.
