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by Pipl Team on Jan 17, 2024
Across the globe, fake online identities are created at an ever growing pace, spreading damage for businesses and consumers alike.
Online platforms have become the prime breeding ground for scammers, and fake identities are the fraudsters’ entry ticket into these platforms.
Source: Federal Trade Commission
AI adds fuel to the fire
These worrisome trends are just the beginning. As fraudsters gain easy access to AI, they have powerful and inexpensive tools at their disposal. Armed with AI, scammers can easily reverse engineer and bypass your fraud prevention rules.
Fortunately, there’s an opportunity to flip the script—to fight back with AI of your own. But before you capitalize on that opportunity, you must know these six facts about fraud and AI.
1. Fraudsters are invigorated.
As fraudsters continue to find new ways to leverage AI, they have a growing sense of confidence. Every breakthrough is a catalyst for a bigger breakthrough, and it’s our job to stop them (which we’ll get to in a minute).
2. They’re using AI to beat rule-based fraud prevention.
They’re using readily available technologies such as ChatGPT, which is advanced enough to self-learn with only a small amount of data, to determine rules and identify vulnerabilities. Once they find an opening, they can attack with pinpoint accuracy, or automate large-scale attacks.
3. Rules are too simple.
Today, rules just aren’t enough. AI can easily bypass them in most cases, recognizing patterns and drawing conclusions about classifications in a matter of seconds. While it may seem logical to create more layers of rules, this approach can become unsustainable and often fail.
4. It’s time to use AI to beat AI.
Fraudsters use AI to reverse engineer rules and find opportunities. That’s unlikely to happen when they’re up against competing AI, because a system’s decision-making process is incredibly difficult to reverse engineer, especially as it continues to learn and evolve.
5. Complexity is a deterrent.
Fraudsters tend to attack the most vulnerable, rarely devoting significant amounts of time and money to more difficult targets, particularly when the potential reward is equal. AI-based fraud prevention can make their lives miserable, preventing attacks at the onset, and leaving them looking elsewhere.
6. The time to act is now.
Nothing about AI is slow, especially when it’s in the wrong hands. In the next few months, fraudsters will make rule-based fraud prevention obsolete. Online providers must act proactively and swiftly to implement counteractive AI to protect their users, maintain platform integrity, and prevent fraud.
How you can take action
There are plenty of steps you can take to expand your knowledge, deter fraudsters, and make your platform a safer place. Here’s where to start:
- Educate yourself and your team about the ways AI will imminently challenge your current threat prevention efforts.
You can watch our on-demand webinar on the topic or request a tailored one-hour workshop. Click here for more details.
- Think “what if?” Take inventory of the rules you have in place and the vulnerabilities they would expose if broken.
- Learn more about how fake identities increase online risks, and how identity-based threat prevention can help protect your business.
Stay up to speed on new AI solutions to fight back against fraudsters’ use of AI. Contact us to get the latest news and learn how we can help.
While everything here is imperative for you to know, it’s only the tip of the iceberg. For much more, including detailed examples of rule-based and AI-based fraud prevention, we invite you to watch our on-demand webinar, exclusive for fraud prevention and trust and safety team members. Request access here .
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