How to spot and avoid AI-powered financial scams
This article is authored by Siddharth Bhat, CTO, Religare Broking Ltd.
Artificial Intelligence (AI) has transformed the way we live, work, and interact, offering incredible benefits in many areas, including finance. However, while AI has simplified and secured many tasks, it’s also being misused by fraudsters who are creating sophisticated scams. With the ability to analyse data, mimic human behaviour, and generate fake content, AI is enabling new types of financial fraud that are harder to detect and easier to carry out.
One such AI-based fraud method is voice cloning for impersonation. Using advanced voice cloning technology, fraudsters can replicate a person’s voice with just a short audio sample. They use this to impersonate someone the customer knows, like a family member or trusted bank representative, to manipulate them into transferring money or sharing sensitive information. These calls often create a sense of urgency, pushing customers to react without caution. To stay safe, customers should avoid sharing sensitive information based solely on voice confirmation, especially under pressure, and verify the caller’s identity through known contact information.
Another risk comes from Deepfakes, which use AI to create hyper-realistic videos and audio that appear genuine. Fraudsters can use deepfake technology to impersonate bank officials, executives, or even family members, convincing customers to reveal confidential information or complete financial transactions. Customers should verify the identity of anyone requesting sensitive information, even if they seem familiar. Calling back on official numbers and double-checking details can help confirm authenticity.
AI-driven phishing and personalised scams have also become more advanced. AI enables “spear-phishing,” in which scammers analyse social media and other online data to craft personalised messages that look legitimate. For instance, someone who recently announced a big deal on social media might receive a phishing email that appears to come from a high-level executive, asking for sensitive information. To protect themselves, customers should be cautious with unsolicited messages, verify the sender, and avoid clicking on links from unverified sources, even if the message seems genuine.
Another concerning trend is fake customer service and social engineering bots. Fraudsters create fake customer service websites and chatbots that simulate real agents to collect account details or direct users to fraudulent payment portals. Customers should only access customer service through verified channels, like official websites or apps, and be wary of unsolicited customer service offers. Paying close attention to URLs, which may contain slight misspellings or variations, can help prevent falling for these scams.
Investment scams and AI-generated fake analysis are also on the rise. AI can create fake investment analysis reports, financial forecasts, and even simulated platforms, luring customers into fraudulent schemes. These scams often promise high returns with little risk, creating an illusion of credibility. Fraudsters may show impressive returns on small investments to build trust before convincing victims to invest larger sums, then disappear with the money. To stay safe, customers should independently verify any investment opportunity, consult trusted advisors, and be sceptical of “too-good-to-be-true” returns.
AI is also used to create fake reviews and social proof manipulation. By generating numerous fake reviews or testimonials for fraudulent financial products, scammers build false credibility, which can mislead customers into trusting illegitimate services. Customers should be cautious with overly positive or vague reviews, rely on reputable sources, and consult trusted advisors before making decisions based on social proof.
In addition to these specific safety tips, there are several general measures customers can take to protect themselves from AI-driven fraud. Enabling security features like multi-factor authentication (MFA) and biometric logins can add an extra layer of security. Limiting personal information shared on social media can help prevent fraudsters from personalising scams. Using strong, unique passwords and updating them regularly can protect accounts, and a password manager can securely manage complex passwords. Installing trusted antivirus and anti-phishing software on devices also helps block malicious activities.
Staying informed about the latest AI-driven fraud trends through cybersecurity advisories and financial institution alerts is essential, as is regularly monitoring accounts and credit reports for unusual activity. Finally, using verified channels for all financial transactions and avoiding unsolicited emails or phone calls about financial matters can prevent many scams.
By remaining aware of these risks and following these best practises, customers can significantly reduce their chances of falling victim to AI-based fraud. While AI is enhancing financial services, customer vigilance and proactive security measures are crucial to safeguarding against AI-driven fraud.
This article is authored by Siddharth Bhat, CTO, Religare Broking Ltd.