The Evolution of Fraud

By Sara Wilbur, executive vice president at M&T Bank January 30, 2024

Sara Wilbur

As an experienced Financial Crimes leader, over the past decade, I’ve seen the evolution of fraud capitalize on leading edge technology, while the public and private sector are often challenged by red tape to operationalize these same technologies being used against us.

We are already seeing Generative AI being used at scale to proliferate fraud scams; however, the target is not necessarily just banks, FIs, and corporations. Instead, this billion-dollar industry is targeting your family, your boss, your friend, you.

The Anti-Fraud industry has invested countless time, resources, and technology in detecting if a transaction is being made by a customer or possibly a threat actor posing as a customer. Because of the success of this technology, fraudsters quickly realized it is easier to socially engineer the customer to make the payment him/herself, versus attempting to “hack” into a profile. Surely, if the customer is the one making the payment directly, the Bank’s technology wouldn’t flag this as suspicious, right?

Although somewhat true, even when a payment is questioned, time and time again customers (scam victims), validate the payment was done by them. They are often on the other side of a fear driven situation in which this payment will perhaps provide medical assistance to their injured grandson, pay their back taxes, or provide transportation costs to their online love interest finally coming “home” to meet.

As much as the Nigerian Prince emails have somewhat sunsetted, the new threat now is building trust to ensure payment is made. Historically, this was simply done via email or messaging apps, at times taking months to substantiate the trust in a relationship before any solicitation of payment was even introduced. While this still reigns true, this was done with minimal visuals of who was on the other side of the keyboard. Now part of the “scam package” is to FaceTime the victims regularly to build trust, and sometimes speed up the process. AI is often used during FaceTiming in order for the suspect to match the image he/she made on the dating profile. In other cases, the FaceTimer is a model hired specifically to reach out to victims on demand when there is doubt of legitimacy.

In the past, when attempting to explain to a victim he/she is being defrauded the question was often asked, “But have you ever met this person?” At which point, the victim solemnly realizes this life may not be real. Now, when attempting to stop a scam victim, banks are often competing against the fraudster “FaceTiming” three times a day, building trust. A recent FinCEN alert substantiates this, bringing to light the continuous scam of “Pig Butchering,” highlighting this very issue and enormous scale, costing American victims billions of dollars in loss.

Although this sounds obvious, imagine your mother/grandmother gets a FaceTime from you, showing your face and using your voice stating you have been arrested and need $1,000 ASAP for bail. Even if this is highly unlikely behavior, it’s your face and your voice asking for help. The trust now shifts from doubt to fear, and payment needs to be rendered immediately. I caution how much of your face and voice is on social media. Consider who may be targeted using your likeness for payment. This is the new Nigerian Prince, and the reality is you can be next.

If you receive a similar scare, call back the requestor immediately and confirm the scenario. Share with your more vulnerable relatives what the new “Face” of fraud can look like.

Humans continue to be the weakest link when it comes to fraud scams, and trends. No matter how much Artificial Intelligence, Machine Learning, or Quantum computing exists, time and time again, frauds are successful due to the abuse of trust, and humans bypassing technological defenses.

Sara Wilbur is the executive vice president at M&T Bank and serves on the board of the M&T Bank Center for Women and Business at Quinnipiac. With a remarkable track record spanning over two decades, Wilbur brings extensive expertise in financial crimes, coupled with a wealth of experience in management, retail, operations, risk management, fraud detection, and anti-money laundering strategies. Sara’s insights and leadership make a significant impact in the industry and advance the field of banking and finance.

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