Deep-fake impostor scams so effective that financial institutions cannot determine their authenticity are the latest trend in financial fraud.
Deepfakes created with AI are so realistic it can be difficult to tell them apart from real identities. Armed with a mix of fabricated and stolen profile pictures, biographies, social network profiles, social security numbers, driver’s license data, and other documents, these deep-fakes can be used to open bank accounts, apply for loans, and carry out financial transactions. Consumers must stay vigilant to protect themselves from fraud and effectively guard their financial assets.
By using AI to simulate behaviors consistent with a real person’s credit profile – such as setting up accounts, making payments, and accumulating a legitimate credit history – deep-fake personas are almost indistinguishable from the real thing. Unfortunately, this means financial institutions are unable to differentiate between a deepfake and a real person, leaving consumers vulnerable to fraud.
Sumsub’s statistics show that the prevalence of deep-fake fraud grew considerably from 2022 to Q1 2023:
- From 2022 to Q1 2023, the proportion of deepfakes among all fraud types increased by 4,500% in Canada, by 1,200% in the U.S., by 407% in Germany, and by 392% in the UK.
During the first half of 2023 alone, the Identity Theft Resource Center (ITRC) has tracked 1,393 compromises. That’s higher than the total compromises reported every year between 2005 and 2020 except for 2017. As they state in their research, “This puts 2023 on pace to set a record for the number of data compromises in a year, passing the all-time high of 1,862 compromises in 2021.”
What are deepfakes?
Deepfakes are a type of identity fraud that use machine learning to either generate a fake persona or impersonate an existing person using manipulated photos and videos of them. Meanwhile, synthetic fraud is a more general term referring to AI-created content usually used by fraudsters.AI-driven technologies lie at the core of both deepfakes and synthetic fraud.
What industries are most impacted?
Any industry working with customers on a remote basis is vulnerable to synthetic fraud and deepfakes. The most affected industries are fintech, payments, crypto, and gambling platforms due to the vast majority of customers who are onboarded online without face-to-face communication.
Financial institutions can fight back to continuing to invest in fraud detection and prevention technology. The first step begins with protecting customers’ personally identifiable information (PII).
The next step in fighting digital catfishing requires collaboration between financial institutions, data providers, government agencies, and law enforcement. By working together, these stakeholders can share information and intelligence, formulate best practices, and build a united front against this latest threat.
These type scams will continue to evolve and increase in sophistication. Both the FBI and U.S. Federal Trade Commission are encouraging consumers to monitor their accounts and use caution when sharing personal information and content online. By utilizing tools like MyPrivacy360, consumers can rest assured that their PII is staying off the Web and out of the hands of cybercriminals.
