AI FRAUD ALERT: Protect Yourself from High-Tech Scams

As AI technologies advance, so do the methods used by scammers to exploit them. From sophisticated voice mimics to automated phishing attacks, we’re here to help you protect your personal data and financial assets from emerging threats.

Artificial Intelligence (AI) is a machine-learning technology that uses existing information and data such as images, content and video to generate new content.

While you may be using OpenAI or ChatGPT to help you quickly draft memos, plan a trip or generate a portrait of yourself as Spiderman, AI can also be used to facilitate fraud. Email scams are becoming more difficult to spot as ChatGPT and online writing tools such as Grammarly eliminate traditional red flags like poor grammar and spelling. This leads to more convincing social engineering, phishing emails, texts and calls to convince victims or employees to reveal account information, personal details or login credentials. AI can also be used to automate fraud and money laundering processes, create fake documents or build more sophisticated cyberattacks.

“Deepfake” audio and videos are also an emerging concern. The technology can, for example, create realistic recordings of a family member pleading for help in a fake personal emergency scam or sound like a familiar customer requesting a card limit increase and extended travel notification.

As an example: in August 2024, the newest in a string of crypto scams that have also used AI-generated videos of Warren Buffett, Jeff Bezos and even rapper 50 Cent, used a deepfake video of Elon Musk to con viewers.(1) In the video, which was generated from an actual recorded interview he gave, Musk is seen telling people to visit a website and deposit cryptocurrency with the promise that they would automatically receive double the amount they deposited. While the promise itself is a clear “too-good-to-be-true” scam, the endorsement by a wealthy celebrity businessperson turns up the believability. Sometimes even labeled as a “live” event, these deepfake videos can be difficult to discern. AI can mimic the voice, facial expressions and physical movements of the speaker, and it rapidly continues to improve. Internet technology and media companies such as YouTube and Facebook have policies requiring creators to disclose the use of AI in their content, but the policy amounts to nothing more than an absolution of responsibility because the creator is the one saying whether the video is altered using AI. And while tech companies are constantly developing and refining systems to detect and remove deepfakes, scammers are constantly coming up with new ways to evade detection.

According to an article from The Economic Times, YouTube said that it had removed more than 15.7 million channels and over 8.2 million videos for violating its AI content guidelines from January to March of this year.(2)

Deloitte’s Center for Financial Services predicts that generative AI could enable fraud losses to reach $40 billion in the United States by 2027.(3)

How Heritage Bank is preparing for the AI wave:

• Stepping up our customer authentication processes.

• Turning on online banking alerts by default for customers.

• Expanding customer alerting for account and payment change requests.

• Adding trusted account contacts for elderly customers.

• Investing in AI and stronger authentication tools.

• Re-verifying customer contact information annually.

• Enhanced monitoring for our online and telephone systems.

• Educating customers and employees on recognizing scams.

You can help us protect your accounts by being patient when we ask for information to verify your identity, especially by phone or online, and by ensuring your contact information is up to date. An extra minute or two may be a hassle, but having to report identity theft or possibly losing funds that you cannot retrieve could be devastating.

If you believe you’re a victim of fraud or if you have any questions, please contact us immediately at 800.455.6126 or contact your banker directly. You can find additional fraud resources at heritagebanknw.com/fraud-resources.

(1) nytimes.com/interactive/2024/08/14/technology/elon-musk-ai-deepfake-scam.html

(2) economictimes.indiatimes.com/tech/technology/how-deepfake-musk-became-internets-biggest-scammer/articleshow/112618750.cms

(3) www2.deloitte.com/us/en/insights/industry/financial-services/financial-servicesindustry-predictions/2024/deepfake-banking-fraud-risk-on-the-rise.html

CONTRIBUTOR: DENNIS D’AMBROSIO

Dennis joined Heritage Bank in 2019. He is currently the vice president, fraud risk/ investigations manager. Dennis has more than 25 years of experience in banking and fraud risk management and is vice president of the Northwest Chapter of International Association of Financial Crimes Investigators (IAFCI).