AI Tools Enable Everyday People to Commit Fraud

Socure Inc. refers to the growing role of artificial intelligence in modern crime as the ‘AI-Fluent Fraudster’.

AI’s Democratizing Trend Rapidly Influences Fraud Incidence and Offenders

Defining the New Criminal

A fresh category of offender has appeared, which identity-verification and fraud-prevention firm Socure Inc. refers to as the AI-Fluent Fraudster. In a study titled “From the Frontline: Fraud’s Napster Moment,” Socure outlines how this label captures the growing role of artificial intelligence. The technology is not only easing the way organized rings execute payment and financial scams, but everyday shoppers are also turning to it.

“On the consumer side, AI has removed the technical barrier to entry,” Mike Cook, Socure’s head of fraud insights, says News. “In our survey, 13.4% of respondents said they had used AI to commit at least one type of fraud, and more than half of those AI-fluent fraudsters showed no evidence of committing fraud without it. These aren’t career criminals picking up a new tool. They’re ordinary people, most commonly men under 30, driven by curiosity as much as by money.”

Socure’s analysis shows that 62.7% of AI-Fluent Fraudsters are male, compared with 55.1% of individuals who engage in conventional fraud. The Incline Village, Nev.,-based firm compiled information from a questionnaire of 1,250 consumers and from its worldwide identity and fraud intelligence network for the report.

Curiosity Over Greed

The majority of these actors employ AI for fraud, with first-party schemes accounting for 81% of cases, and many appear motivated by inquisitiveness.

“Curiosity was their top motivation (41.8%), ahead of economic hardship (37.7%). Fraud has always been driven by need or greed, so curiosity is new,” Cook says. “They also feel removed from it: 16.5% said using AI made it feel like they weren’t the ones committing fraud, nearly three times the rate of traditional fraudsters (6.1%). First-party fraud has generally been driven by economic hardship and downturns in the economy. With curiosity taking the lead in motivation, I have concerns that even in a solid economy, first-party fraud rates may continue to grow at substantial volumes.”

“First-party fraud is the easiest place to start because it can be rationalized as a way to recover money that someone believes they are owed. If the claim succeeds, the consumer learns what the system will accept. The same process can then be repeated across merchants, lenders, gaming platforms, and other industries,” the report notes.

Automating the Crime

For organized syndicates, AI enables them to operate more like a corporation, automating assaults and mass-producing identities for repeatable profit, Cook explains. “Ring members committing first-party, synthetic identity or identity theft were far more likely than solo actors to use AI (67.3% vs. 42.9%) and more than twice as likely to work across multiple fraud types.”

“That’s what makes it more important to look beyond the image. Synthetic documents and deepfake imagery are easy for fraudsters to produce, so it isn’t enough to ask whether a document is real. A friend of mine who likes to say, ‘If you’re solving for a deepfake, you’ve already lost,’ and I think that’s right. You have to look at the bigger picture, including device and location data.”

Methods of AI-Driven Fraud

Consumers use AI to generate false hardship letters, fake income statements, and reasons for refunds. They also skip payments on buy-now-pay-later services and avoid credit card bills.

Cook warns that first-party fraud may serve as a gateway to other crimes. He believes synthetic fraud could rise as people learn to use AI for building fake identities.