In today’s digital age, scams and fraud have become more sophisticated than ever before. With the rise of artificial intelligence (AI), scammers are finding new ways to deceive unsuspecting victims. However, there are also individuals and organizations working to combat this growing problem. One such individual is Clark Hoefnagels, who created an AI-powered tool called Catch to help spot scam emails.
Hoefnagels was inspired to create Catch after his grandmother fell victim to a scam and lost $27,000. He felt a responsibility to protect his family and wanted to develop a solution to prevent others from falling into the same trap. He decided to test the capabilities of AI in recognizing fraudulent emails using the popular AI chatbot, ChatGPT. The results were promising, and from this initial experiment, Catch was born.
Catch is an AI system that scans incoming emails, specifically those in Google’s Gmail, and highlights any that are deemed fraudulent or potentially so. This technology is part of a broader category known as generative AI, which refers to AI tools that can generate new content. Initially, generative AI could only generate text replies, but it has now evolved to create various forms of content such as photos, paintings, voice content, music, and documents.
Unfortunately, scammers have also caught on to the potential of AI and are using it to facilitate fraud. There is even a product called FraudGPT sold on the dark web, allowing criminals to create content for a range of fraudulent activities, including phishing emails and scam web pages. Voice cloning is another alarming development, enabling scammers to convincingly imitate loved ones in distress and extort money.
The scale of AI fraud is growing rapidly. According to anti-fraud organization Cifas, reports of AI tools being used to deceive banks increased by 84% in 2022. A recent report in the US also highlighted the significant sophistication of cybercrime thanks to AI. Given these alarming statistics, one would assume that products like Catch would be popular among the public. However, Hoefnagels discovered that people generally do not prioritize protection from scams, even after being scammed themselves. He encountered a man who lost $15,000 but showed no interest in Catch’s email detection capabilities, as he believed it wouldn’t happen to him again.
Interestingly, older people tend to be more concerned about scams, but they often rely on low-tech tactics like being advised by their children not to answer or reply to unknown contacts. Hoefnagels himself adopted this approach with his grandmother, instructing her to avoid answering the phone or using email altogether. Although awareness of scams is rising, many individuals choose not to invest in protection tools.
Banks, on the other hand, cannot afford to be complacent about AI-powered scams. Two-thirds of financial firms view AI-powered scams as a growing threat, according to a global survey. Recognizing the need for advanced technology to combat fraudulent activities, many banks are now utilizing AI tools. Norwegian start-up Strise has developed AI-powered software that helps European banks detect fraudulent transactions and money laundering rapidly. The software automates checks and brings together various pieces of information quickly. This is crucial because criminals can exploit new technologies much faster than banks can due to regulatory constraints on data sharing.
Another company, Featurespace, is making strides in fighting fraud with AI software. Their software tracks the behavior of genuine customers rather than scammers. By creating a statistical profile of normal customer behavior, the software can identify anomalies that might indicate fraudulent activity. Featurespace’s technology has been deployed by banks such as HSBC, NatWest, and TSB in 27 countries.
Despite his initial frustration at the apathy of the general public towards scams, Hoefnagels now understands that individuals often think they won’t be targeted. This realization has shifted his focus towards pushing companies and governments to take more action against scams and fraud.
In conclusion, the use of AI in scams and fraud is a growing concern, with criminals exploiting generative AI to create deceptive content. However, individuals like Clark Hoefnagels are developing AI tools to combat this issue. Products like Catch can scan emails for signs of fraud, while banks are increasingly using AI to detect and prevent fraudulent activities. While awareness of scams is rising, there is still a long way to go in ensuring widespread protection against the advancements in AI-powered fraud.
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