Spotting AI Scams

Al has become an integral part of our lives, from customer service no insurance claims. But it is also becoming a tool for fraudsters who use it to scam individuals and corporations

- Meghna Maiti

The term artificial intelligence (AI) was first coined by John McCarthy, the father of AI, in 1955. By 2024, on the back of digital innovations during the Covid pandemic, AI had become an integral part of our lives. Insurance companies are now using AI to improve claim settlement; lenders are using it to better match borrowers to loan products; and Al-powered chatbots are answering customer queries, among others.

While AI has made processes convenient for both providers and receivers, it has also become a deadly weapon in the armoury of online fraudsters.

Says Ankit Ratan, co-founder and CEO, Signzy, a digital banking infrastructure provider: "The evolution of technology is like a doubleedged sword: increased sophistication leads to a rise in AI-powered scams.

This is a growing concern, particularly in India, where consumer data and personal information are directly impacted." A recent study by Forrester Consulting and commissioned by Experian, a leading global information services provider, sheds light on a troubling surge in AI-related frauds in India. A significant 64% of respondents said they experienced increase in frauds over the past year and another 67% said they were struggling to keep pace with the rapid pace of evolution of such frauds and threats.

Typically, fraudsters impersonate high-trust relationships such as bank or financial institution, close relative, friend or boss-and create a sense of urgency or panic that forces you to act in a way you normally wouldn't. "We have seen several cases of senior citizens, Gen Xers, and millennials being victims of payment fraud. People across demography are equally susceptible to such scams," says Adhil Shetty, chief executive, BankBazaar. However, senior citizens could be more vulnerable to such fraud, especially if they are not conversant with modern technology.

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