Warning over threat of AI generated fraud

17th April 2024

Fraud prevention service, Cifas has released its 2024 Fraudscape report, detailing the latest fraud data and intelligence recorded by its members during 2023.

The research found that more than 374,000 cases were reported to the Cifas National Fraud Database (NFD), with members recording an incident of fraud every two minutes, preventing more than £1.8bn in fraud losses.

Additionally, over the last 12 months, members reported being increasingly concerned about the potential growth in AI generated fraud, enabling sophisticated phishing scams and synthetic identities.

Accounting for 64% of overall cases to the NFD, identity fraud remains the most dominant case type, with over 237,000 cases recorded in 2023. Organisations reported concerns as criminals sharpened their social engineering tactics and continued to exploit the cost-of-living pressures, as well as the increased use of AI and data harvesting techniques to fraudulently open and abuse accounts, steal identities and takeover customer accounts. Personal bank accounts were the most targeted, up 12% on the previous year.

Increasing by 13% since 2022 – the largest volume increase across all case types – facility takeover now represents one in ten cases recorded to the NFD. The telecommunications sector was the most impacted, accounting for 41% (previously 29%) of cases recorded. This increase partly reflects a shift in fraudulent methods, with criminals increasingly targeting existing accounts to obtain new products or upgrades.

Over 73,000 cases of misuse of facility were reported in 2023 – a 5% increase compared to the previous year. Loan products recorded a notable rise (+82%), followed by asset finance (+45%) and plastic cards (+17%). The overall misuse of facility data covered several industries, highlighting the impact of the cost-of-living pressures and individuals looking to avoid payments or financially gain from stealing assets.

Stephen Dalton, Director of Intelligence for Cifas, said “As our latest data shows, the impact of fraud and financial crime on people, companies and the public sector continues at epidemic levels.

“Ongoing economic uncertainty and cost-of-living pressures provide a rich source of opportunity for criminals to exploit people at their most vulnerable. These circumstances may also be the catalyst for some individuals to commit fraud and supplement their income during difficult times.”

Mike Haley, CEO of Cifas, said “Criminals are finding new and sophisticated ways to target consumers, such as through social media and AI and deepfake technology. We are committed to driving down these cases through the sharing of data and intelligence and building effective defences to prevent fraud.

“To achieve our goal takes a huge multi-sector, collaborative effort. That means having effective cross-government leadership in response to fraud, enhancing victim support, providing critical counter-fraud insight to social media and Big Tech companies, and educating young people about the serious consequences of financial crime. We continue to work closely with the fraud prevention industry and multiple sectors to stem the rising tide of fraud and financial crime.”