Tag Archives for fraud

Senate Aging Committee tackles AI generated scams

Published in RINewsToday on January 8, 2024

Over two months ago, U.S. Senate Special Committee on Aging Chairman, Bob Casey (D-PA), put the spotlight on Artificial Intelligence (AI) driven fraud and scams. During the Nov. 16 hearing held in SD-106, “Modern Scams: How Scammers Are Using Artificial Intelligence & How We Can Fight Back,” the Senate panel highlighted the most common scams targeting seniors in 2023 with a focus on how scammers are using AI to create voice-clones and deep fakes to deploy scams and convince targets of their veracity. The hearing also explored how AI is being used to enhance fraud detection technology.

During the Senate panel hearing, lasting one hour and a half, Chairman Casey announced the Senate Aging Committee’s release of its annual Fraud Book, and brochure on AI-powered  scams and a bookmark featuring tips to avoid scams. Chairman Casey also noted he would approach the Federal Trade Commission (FTC) to request information about the agency’s work to track the use of AI scams targeted to older Americans.  On Dec. 5, Casey sent a letter to the FTC urging the agency to track AI scams.

Senate Panel Takes a Look at AI’s Good and Bad

“Today, we heard disturbing testimony about scammers using artificial intelligence to make their ploys more life-like and convincing,” said Chairman Casey in his opening remarks. “Any consumer, no matter their age, gender, or background, can fall victim  to these ultra-convincing scams, and the stories we heard today from individuals across the country are heartbreaking. As a parent and grandparent, I relate to the fear and concern these victims must feel. Federal action is needed to put up guardrails to protect consumers from AI—while also empowering those that can use it for good,” he said.

At the Senate Panel hearing, Ranking Member Mike Braun of Indiana warned that an increasing number of sophisticated fraudsters are carrying out AI attacks on seniors by utilizing voice-cloning and deepfakes to create images nearly identical to a real-live  person to dupe consumers into giving away valuable information and money.

“In context of frauds and scams, AI can be leverage negatively – but it can also be part of the solution,” says Braun.

According to Braun, the private sector has used AI and machine learning since the 1990s to combat fraud.  He called on the federal government to embrace similar technology by testing promising solutions to systems that suffer the most fraud, like Medicare.

Gary Schildhorn, a Philadelphia attorney told the Senate panel about his story of an attempted scam against him where his son’s voice was cloned by AI.  When he received a call that sounded like his son Brett, saying he had been in a car accident and needed $9,000 to post bail, he almost fell for the scam.

“There was no doubt in my mind that it was his voice on the phone—it was the exact cadence with which he speaks.  I sat motionless in my car just trying to process these events. How did they get my son’s voice? The only conclusion I can come up with is that they used artificial intelligence, or AI, to clone his voice…it is manifestly apparent that this technology… provide a risk-less avenue for fraudsters to prey on us,” says Schildhorn.

In his testimony, Steve Weisman, an Amherst attorney with Margolis, Bloom & D’Agostino who teaches white-collar crime at Bentley College in Waltham, pointed to the Federal Trade Commission’s Consumer Sentinel report for 2022, revealing that seniors reported more than $1.6 billion in losses to frauds and scams. But the actual amount could be as high as $48.4 billion, he says, because many were afraid to report losing money due to embarrassment or sham.

Seniors Tempting Target to AI Scammers

Seniors are the target of scammers because “that is where the money is,” notes Weisman, because they may have a “life time of accumulated savings that make them a tempting target for scammers.”

According to Weisman, AI has created additional opportunities for phone call scams,  because it can be used to remove foreign accents from scammers voices, making them appear more reliable.  AI created Robocall scripts can enable conversations with the scammer’s targeted victims, too.  Finally, AI cloning technology can make the targeted victim below they are talking to a loved one.

Weisman says that AI can be used by scammers to set up social media bots that appear to come from “real” people.  This allows them to create large numbers of believable bots to promote numerous scams, particularly involving cryptocurrency.

Scammers are now using AI technology more effectively in romance and family emergency scams, too, warns Weisman. 

AI can create fake profiles on multiple dating platforms, writing a grammatically correct biography, making it easier for scammers in foreign countries who are not familiar with speaking English. AI can also create photos or deepfakes for the profile, he says.

Weisman told the panel that AI generating software can create an audio voice that sounds exactly like that of the grandchild, using as little as 30 seconds worth of the grandchild’s voice.

Seeking a Balanced Approach

“The interplay of AI and scams brings forth both challenges and opportunities. Striking a careful balance between fostering AI innovations and protecting vulnerable populations is paramount,” says Dr. Tahir Ekin, of the San Marcus, Texas -based McCoy College of Business.

“In the fight against AI driven scams, awareness and AI literacy are crucial weapons,” says Ekin. “Existing efforts that educate seniors on safe digital practices, such as the work FTC Federal Advisory Council and the “Pass It On” campaign, can be enhanced to include AI related scams,” he says.

Tom Romanoff, Director, Technology at the Washington, DC-based Bipartisan Policy Center, stated, “As the good of this technology is being explored, we must acknowledge AI’s risks and seek a balanced approach, focusing on curtailing abuse while promoting positive uses and innovations.”

“As I stated in the beginning, we must tackle the abuse while driving toward positive application to safeguard its adoption,” says Romanoff.

To view the Senate Aging hearing, held on Nov. 16, go to: https://www.youtube.com/watch?v=7CMhzgQdz_I.

For a copy of Fighting Fraud: Top Scams in 2022,  go to https://www.aging.senate.gov/imo/media/doc/fraud_book_2023__english.pdf

Protecting your hard earned money from Holiday scammers 

Published in RINewsToday on December 18, 2023

f the Christmas holidays and consumers ramping up their holiday shopping, the Washington, DC AARP warns shoppers to be aware of the uptick of scams. A new 2023 AARP Fraud Watch NetworkTM report puts the spotlight on how criminals target consumers during the holiday season.  

According to the report, 80% of U.S. consumers say that they have experienced some type of fraud in 2023 – many occurring during holiday shopping season.  The researchers say that these scams have increased from last year’s report, from receiving fake notifications about shipments, to online ad scams, and more.

“The concerning findings from our annual survey are that fraud is on the rise and that knowledge about how to stay safe from fraud is dropping,” said Kathy Stokes, AARP Director of Fraud Prevention Programs in a December press release announcing this year’s findings. “Education plays an important role in combating fraud, but we can’t educate our way out of what is now a rampant issue,” she said.

AARP’s report noted that in 2023 significantly more consumers plan on shopping online compared to the last two years. With this increase in internet shopping, scammers often place fake ads online and across popular social media sites offering steep discounts on the hottest items. 

Although peer-to-peer payment platforms such as Venmo, PayPal, Square Cash, and Zelle, etc. have been around for awhile, they have become increasingly popular as a way to make online payments to businesses. Consumers turn to these platforms for convenience, speed and security.  

According to AARP’s findings, the use of these services have increased significantly for a second year in a row. A large majority of respondents shared they do business those, or similar, apps – such as sending money to businesses they have no previous relationship with. In the unfortunate event of fraud, these apps provide little protection to scammed consumers, warns the report.

Gift cards continue to be popular gifts, 66% of those surveyed planning to purchase them this holiday season. However, 27% of consumers have experienced either giving or receiving a gift card with no monetary value on it. “Criminals have old-school ways of manipulating cards hanging on retail racks and high-tech ways of searching online for cards with balances and draining them,” says AARP’s Stokes. “It may be safest to purchase a gift card directly from the card issuer’s website,” she notes.

In a 10-question fraud knowledge quiz that was again part of this year’s AARP survey, most respondents failed with only 28% of being able to answer only 7 or more questions correctly.   The quiz results call for the need to make consumers aware that retailers will never request your login information to provide customer support.  

AARP’s recently released report suggests: 

It’s better to use credit cards for purchasing gifts because they offer the most consumer protections of any payment method.

It’s important to regularly accept some upgrade prompts for your devices because these updates are to patch known fraud vulnerabilities.

It’s risky to do a web search for a company’s customer support network because criminals buy ads impersonating those companies. Check billing and credit card statements for customer service, use the number on the back of your credit cards, or go directly to the company by typing in their web address, like www.aarp.org.

AARP Rhode Island – Fighting Fraudsters

“AARP Rhode Island works hard every day to make sure that Rhode Islanders have all the information they need to protect themselves and their families from scams, especially around the holidays,” said AARP Rhode Island State Director Catherine Taylor. “We hold regular fraud-prevention tele-town halls, our Speakers Bureau volunteers give free Fraud Watch presentations to audiences across the state, and we fight fraud via AARP’s Fraud Watch network (www.aarp.org/fraudwatch), which provides vital information and scam alerts. Anyone can subscribe for free,” she says.

“Last summer, AARP Rhode Island held free document shredding events around the state where more than 900 people dropped off nine tons of documents,” Taylor added. “And we are so pleased that the General Assembly passed our bill to address gift card fraud this year. Retailers are now required to post warnings to consumers that it is always a scam if someone asks you to buy a gift care to pay a bill or fee.  If you can spot a scam, you can stop a scam,” she says.

Approaching holidays gives more opportunities for deception says RI Attorney General

“The best way Rhode Islanders can avoid falling victim to a scam during the holiday season, and year-round, is to stay vigilant and stay educated,” said Rhode Island Attorney General Peter Neronha. “Scammers are becoming more and more sophisticated in the way they target their victims, and the holidays provide new opportunities for deception. Rhode Islanders can and should call our office or visit our website for advice and information if they are faced with a possible scam situation.”

Watch out for text or phone scams that appear to be from UPS, FedEx, or other mail services, warns the AG’s Consumer Unit. This can be as simple as a text message stating that UPS tried to deliver a package, but was unable to do so, or as deceptive as a phone call telling a consumer they will not receive their package unless they pay money in cash or gift cards. Consumers should not click on any links they receive via text message or Facebook message from numbers they do not know.

The AG’s Consumer Unit says that paying by credit card gives consumers more protection than other forms of payment. The payment apps mentioned (Cash App, Zelle, PayPal, etc.) cannot offer the same level of protection as paying by credit card. Gifts cards and cash payments are a red flag that a consumer may be the victim or potential victim of a scammer. Do not buy from individuals who request payment outside of a trusted online marketplace’s payment system.

Always do your own research.  A consumer may be able to quickly determine whether they are being targeted by scammer from a simple online search including keywords and “scam” or “complaint.” User feedback on the Better Business Bureau website may also help consumers identify whether the company they are interacting with is legitimate or fraudulent, says the AG’s Consumer Unit.  

Before spending hard-earned money on an opportunity, good, or service that may be a scam, consumers can reach out to our Consumer Unit with questions or concerns at (401) 274-4400 (prompt 1). An investigator or attorney will get back in touch as soon as possible. Alternatively, consumers may file a complaint online at http://riag.ri.gov/forms/consumer-complaint.

To read the full 2023 AARP Fraud Watch Network Report and learn more visit: www.aarp.org/holidayscams2023

Additional Resources:

Finally, AARP Fraud Watch NetworkTM is a free resource that equips consumers with up-to-date knowledge to spot and avoid scams, and connects those targeted by scams with our fraud helpline specialists who provide support and guidance on what to do next. Anyone can call the helpline at 877-908-3360. AARP Fraud Watch NetworkTM also offers free, facilitated peer discussion groups that seek to provide emotional support for those experiencing fraud; and advocates at the federal, state, and local levels to enact policy changes that protect consumers and enforce laws.

For a copy of the U.S. Senate Special Committee on Aging, “Fighting Fraud: Top Scams in 2023, go to https://www.aging.senate.gov/imo/media/doc/fraud_book_2023__english.pdf.