Scamming Becomes $422 Billion Business With AI Assistance

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That’s according to a report Saturday (Oct. 10) by Bloomberg News, citing data from the Global Anti-Scam Alliance estimating victims lost $442 billion across 42 countries last year, more than some valuations for the worldwide cocaine trade.

“It’s just gotten so cheap and so easy,” said Sean Letz, the Asia cyber lead at Marsh Risk, an American insurance broker and risk-management adviser. “What a lot of companies start to recognize is that you only get to a certain point, and trying to play whack-a-mole with the scams — with the different tactics — is impossible.”

The report noted that scams have evolved significantly since the days of the “Nigerian prince” email. Now, stolen data is used to find targets on social media, employing AI-generated scripts, phishing pages and laundering networks.

Fraud is becoming faster as well, Bloomberg added. While pig-butchering schemes can still take weeks or months of grooming, nearly two-thirds of victims pay within 24 hours of their first contact with the scammers.

Phishing operations can be even faster, the report said, with the makings of fake websites to mimic companies, banks and payment gateways being sold as kits. And an analysis prepared for Bloomberg by cybersecurity company ZeroFox shows how scammers with limited technical ability are abusing legitimate developer platforms and AI app builders to create pages with just a few prompts.

Phishing pages uncovered on the free tiers of nine developer platforms and AI app builders increased more than fourfold to 10,600 in a two-year period, the report said.

PYMNTS spoke last month with Erin West, founder and president of the scam prevention group Operation Shamrock.

She told PYMNTS CEO Karen Webster that she rejects the notion scam cases are hopeless because the scammers are overseas. Scams, she argued, begin with a contact, whether that means an Instagram profile, a LinkedIn account, a WhatsApp number, all of them producing records. Those records can be traced to another person, a shell company or a cloud account filled with of photographs and identifying details.

“If you keep pulling those threads, you can identify people,” West said.

Meanwhile, research by PYMNTS Intelligence shows a growing number of frauds going unreported. The number of victims who didn’t report their scam at all rose 26% in the past year, to 11%. The most common reason, mentioned by 28% of non-reporters, was being unaware that reporting was an option.

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