Common Types of AI Fraud

Upset man at laptop

In recent months, artificial intelligence (AI) has swept the digital landscape, lauded for its ability to streamline work and task automation, and data analysis. Despite the depiction of AI in films like “I, Robot” and “Deus Ex Machina,” it can provide a multitude of benefits inside and outside the workplace.

However, one unforeseen consequence has been the illegitimate use of it by fraudulent individuals. Scammers have co-opted AI for their own nefarious purposes. They use AI’s capabilities to identify targets more efficiently, personalize the scam to their potential victims, and scour through large amounts of data quickly.

Continue reading below to familiarize yourself with the up-and-coming AI scams to watch out for, and how best to avoid getting ensnared in their traps.

Phishing Scams

Phishing scams are one of the oldest tricks in the book and have only been elevated by AI. Scammers use AI to craft convincing emails or messages from reputable organizations. You may have already received one of these in the past, from someone masquerading as your bank, phone carrier, or Amazon, asking you to update your account information by clicking on a link. The link will lead to a fraudulent website, also posing as a legitimate one, where your account information will be harvested. To avoid these, check the email address. Oftentimes, the name in the “From” field might appear as the ostensible organization, but upon further investigation, the email address will be that of a random person.

Imposter Scams

Imposter scams involve fraudsters posing as trusted organizations or individuals like government agencies.[1] In this instance, AI technology allows scammers to mimic voices to imply authenticity. For example, a common instance of this type of scam is someone claiming to be calling on behalf of the IRS asking for immediate payment. The reality is, the IRS will never call you for an immediate payment. The best way to avoid these is to hang up and call the organization via their reputable website yourself.

Tech Support Scams

Tech support scams operate under the guise of offering technological assistance relating to your personal devices, with the most common offering to help with alleged computer issues.

Scammers may use pop-ups on your devices or call directly to convince you to provide access to your devices for a non-existent issue. From there, they ask for payment for these unnecessary services.[2] In the most common iteration of this scam, you receive a pop-up on your computer claiming it is infected with a virus, urging you to call a toll-free number immediately.

The people on the other end of that phone number are not there to help you but get as much money from you as possible.

Grandparent Scams

Grandparent scams exploit the emotions of their victims by masquerading as the victim’s grandchild. In these scenarios, the scammer will oftentimes act as they’re in distress, and urgently request money from their victim.[3] AI technology allows scammers to research their victims beforehand and personalize their scam. People have even reported scammers using AI to mimic their loved one’s voice to make the scam seem even more legitimate.[4] In these instances, it’s best to hang up and call your loved one’s phone number directly for clarity.

Deepfake Scams

Similar to methodologies employed during the aforementioned grandparent scams, deepfake technology – which is fueled by use of AI technology – allows scammers to manipulate videos or images. The result is realistic-looking media that oftentimes features well-known individuals like politicians or celebrities. This technology can be leveraged to trick individuals into believing misinformation or engaging in illegitimate financial transactions. For example, you may see a public figure or actor encouraging you to invest in something. To verify, try searching the name of the individual plus the investment they’re touting – it’s likely a legitimate news publication would have covered it if the campaign was genuine.

Malware Attacks

Malware attacks have been around since 1978, with the invention of the personal computer predating the first use by only seven years.[5] But in recent years, AI has allowed malware to become more sophisticated. Now, scammers can use AI technology to make malware harder to detect and more intelligent in evading traditional security measures. The most common example of malware is downloading a seemingly innocuous file, but after saving it to your computer, malware infects your computer.[6]

It’s true that AI has empowered traditional fraudulent scams even further, but through the power of caution, awareness, and remaining educated on the latest underhanded tactics, you can avoid them. Keeping your wits about you when picking up a call from an unknown number is key. Be cautious when providing access to your personal devices or personal and financial information.

Additionally, always try to independently verify the identity of individuals or organizations contacting you. Don’t take them at their word, and instead use official contact information from trusted sources to contact the organization directly. Employing all of these tactics can help you safeguard your financial well-being and avoid becoming the victim of the next AI-driven fraud.

Information provided by Valorem Financial and written in collaboration with Oechsli, a non-affiliate of Cetera Advisor Networks, LLC and CWM, LLC.

[1] Federal Trade Commission: Consumer Advice. “Imposter Scams.” Consumer.Ftc.Gov, 18 May 2016, Accessed 14 Jul. 2023.

[2] Waterman, Genevieve. “The Top 5 Financial Scams Targeting Older Adults.” National Council on Aging, 27 Jul. 2022, Accessed 14 Jul. 2023.

[3] Waterman, Genevieve. “The Top 5 Financial Scams Targeting Older Adults.” National Council on Aging, 27 Jul. 2022, Accessed 14 Jul. 2023.

[4] Salam, Erum. “US mother gets call from ‘kidnapped daughter’ – but it’s really an AI scam.” The Guardian, 14 Jun. 2023, Accessed 04 Oct. 2023.

[5] Saengphaibul, Val. “A Brief History of The Evolution of Malware.” Fortinet, 15 Mar. 2022, Accessed 04 Oct. 2023.

[6] AARP. “Tech Support Scams.” Aarp.Org, 1 Apr. 2022, Accessed 14 Jul. 2023.

Get in Touch

In just minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Contact Us

Stay Connected

Business professional using his tablet to check his financial numbers

401(k) Calculator

Determine how your retirement account compares to what you may need in retirement.

Get Started