When the AI boom kicked off in late November following the launch of ChatGPT it was easy to think the new technology would make life easier for people.
However, it appears there are more sinister uses for machine learning and chatbots than getting it to do your homework for you.
Jeremy Asher, a fraud expert and lawyer at Setfords, believes AI can be used by fraudsters to “disguise as genuine people” so they can set up bank accounts in victims' names.
Application Fraud
Application fraud is when criminals set up bank accounts pretending to be somebody else using stolen data, typically to launder money.
Last year, credit card application fraud in the UK reached record levels and during the last quarter, it climbed by 18% making it the busiest period in three years.
Coincidence or not, ChatGPT was launched in late November 2022 and with chatbots being released every month Asher thinks AI could be a catalyst.
Asher told Proactive: “I have clients coming to me asking: ‘How has a person got my identity and used it to make an application for a bank account?’”
Banks use security measures, along with AI, to review answers given on an application to confirm that the person applying for an account is who they say they are.
“AI helps these false applications seem more believable and it means more could get accepted… leading to victims having their names marked as a risk by banks,” the lawyer added.
When people realise they’ve been a victim of application fraud they are required to prove to the banks it wasn’t them.
AI can make it so realistic that it's “extremely difficult” for victims to prove it wasn’t them.
Remaining Safe
“Adding a £ sign to your passwords can be useful as keyboards in other countries don’t always have them,” Asher revealed as one tip for remaining safe online.
He also emphasised the importance of regularly changing passwords, using dual verification, being aware of online risks and keeping IDs and bank details secure.
Another negative use of AI is its ability to create “spoof websites” for phishing scams that look to copy a website of companies so realistically a victim cannot distinguish between it and the real site.
With the scale of these fake websites being ramped up since the rise of AI, tips on how to spot a scam site are becoming even more important.
What can banks do?
“It's AI against AI,” Asher added, pointing out that before humans verify the accounts the technology uses algorithms to check for any discrepancies.
The Setfords lawyer thinks slowing down the speed of bank transactions could help reduce the number of issues.
“Speed isn’t necessarily a good thing… it's used by criminals to their advantage,” Asher said.
By slowing transaction times down, it could help banks spot fraud before the money has been moved, he argued.