The availability, adaptability and evolution of AI has made it easier for fraudsters to trick targets out of money and information.

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The emergence and evolution of Artificial Intelligence (AI) has taken the world by storm. It has been rapidly adopted by individuals, businesses, governments and educational institutions – a. And, unfortunately, by fraudsters. While this emerging technology has many potential benefits, such as summarizing data and enhancing customer service, its drawbacks include its use to advance, enhance and expand cyberattacks.

Here are some of the most commons scams affecting individuals and businesses today, and the effect of AI on their efficacy and impact.

Social engineering attacks

Social engineering is the art of using psychological manipulation to trick people into making security mistakes or giving away confidential information. Social engineering tactics are used in the most common and successful scams, including phishing, romance, employment, and investment scams.

Preying on human nature’s inclination to trust, social engineering has always been one of the most common and effective ways a fraudster can gain access to sensitive information. When they layer on the power of AI, scams become even more believable and successful, as follows:

• Human-like interaction: Artificial intelligence can imitate the tone, style and content of genuine communication, such as an email, phone call, chatbot or even a video call.
• Deep fakes: AI can impersonate a human with high accuracy and trick people into revealing sensitive information, carrying out financial transactions or spreading misinformation.
• Voice synthesis: Cyber criminals can gather audio data from people sourced from online interviews, customer service calls or videos on social media sites. Using AI-powered voice synthesis tools, they can accurately mimic the tone, cadence and pronunciation of real people.

Phishing scams

Using AI, cybercriminals can create more in-depth, grammatically correct emails, making them harder to detect as fraudulent. Moreover, by pulling information about their target from a range of social media platforms, as well as stolen details they may have acquired through a data breach, fraudsters can also create content that is more targeted and personalized, making it look that much more authentic.

In addition to the quality of the scam, AI has made it easier for fraudsters to increase the quantity of scams. With AI’s ability to scan the internet in seconds for data, fraudsters can cast a wider net for their phishing scams, but with more specific details about their targets.

Romance scams

Romance scams have become increasingly prevalent and effective as AI has become more sophisticated and accessible. According to a Norton report, online dating scams increased 72% in the past year, with nearly a third of those targeted been catfished (i.e., when a scammer uses a fake identity to trick their target into believing they’re in a real online friendship or romance with them) by fake personas.

• Using AI, romance scammers can:
• Generate compelling messages that sound like genuine conversation
• Use face-swapping technology and voice simulators in video calls, making their target believe they are speaking with a real person
• Use AI to quickly scan the internet about their targets, enabling them to tailor their messages to their interests and situation
• Create entirely new identities with AI software, complete with a voice, face and accent

Employment scams

With challenging economies worldwide and many people finding it difficult to secure meaningful employment, job scams are on the rise. From unsolicited email offers to fake hiring managers promoting work on social media, these scams lure job seekers with promises of work, advancement, great pay and benefits.

There are a number of employment schemes running at the moment. Here are some of the most common:

• Fake job listings: These listings normally ask candidates to pay a fee to complete their application or get started.
• Fake hiring firms: Scammers will pose as an agency, institution or hiring firm and request a screening fee.
• Email offers: Fake job offers (often about jobs you never applied for) may ask for sensitive information such as ID and bank account numbers to get you onboarded.
• Online interviews: May ask candidates to input sensitive information in order to gain access to the interview.
• Work-from-home jobs: Where you may be required to send money to get equipment, like a computer and monitor.

Investment scams

A recent experiment carried out by the Ontario Securities Commission (OSC) revealed that AI-enhanced scams pose significantly more risk to investors compared to conventional scams, again using techniques that convince investors into believing something that simply isn’t true. In the investing world, AI can be used to:

• Rapidly spread fake misinformation about an investment opportunity
• Create a fake investment opportunity
• Produce deceptive telemarketing through voice cloning technology
• Impersonate celebrities to create fake endorsements
• Create frenzied situations that lead to misinformed, emotionally driven or impulsive investing decisions

What’s more, as AI’s capabilities have gained wider recognition among fraudsters, there has been a rise in investment scams promoting AI-driven trading systems that claim to “never lose” or offer “guaranteed returns.” These schemes have deceived investors and led to significant financial losses.

How to protect yourself

The availability, adaptability and evolution of AI has made it easier for fraudsters to trick targets out of money and information. Some of the tried-and-true defense strategies no longer apply, which means people and businesses must find new ways to protect themselves. Here are some tips:

• Look for inconsistencies in tone: Whether in an email, phone call or video call, stay alert for phrases that don’t follow the tone of the conversation.
• Watch movements on a video call: If the “person” on the other end of the call is holding themselves particularly still, it could be a sign that they’re using face-swapping technology that doesn’t hold up when they move or turn
• Keep family and friends up to date: If using a dating site, keep others in the loop about the people you’re connecting with – especially if a conversation or request seems strange. They may have better perspective to spot a red flag
• “That sounds strange…”: Always remain skeptical when faced with an out-of-ordinary request, particularly when it comes to divulging information or sending money
• If it sounds too good to be true, it is: Job scams in particular use this tactic, so be sure to do your research before applying for a position. Visit the company’s website and compare what you see against what’s in the job listing. Don’t engage in requests to transfer funds – no legitimate employer will ask you to write cheques, send gift cards or send wire transfers to “get started” on a job.

Raise your “cyber shield”

To protect yourself against today’s AI-empowered cybercriminals, it helps to be cyber aware and safeguard your online activities. Visit RBC’s Be Cyber Aware site for more tips, and stay informed about any new or ongoing scams by checking RBC Current Scam Alerts.

Lastly, if you are not already using it, talk to your Investment Advisor about RBC Wealth Management Online, which offers RBC Dominion Securities clients a secure and convenient way to communicate with their Investment Advisor. It also provides you the ability to view your accounts, transfer funds and provide or receive important information – while staying safe from cybercriminals.

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This information is not intended as nor does it constitute tax or legal advice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ® / TM Trademark(s) of Royal Bank of Canada. Used under license.