How scammers are using AI to steal money during the Christmas season

Holiday sales have become a breeding ground for large-scale frauds orchestrated with the help of artificial intelligence. Visa and Mastercard have reported a significant increase in blocked transactions, confirming the growing threat.

According to the U.S. Federal Trade Commission, shoppers lost $8.7 billion to fraud in the third quarter of 2024 – a 14.5% increase from the previous year. Fraudsters are using AI to automate tasks, including sending phishing emails, creating fake websites, and generating fake IDs like passports or driver’s licenses.

Scams often target unsuspecting shoppers, as happened to Michael Maestranza of New Jersey. He was lured in by an ad for a Christmas advent calendar, but the website turned out to be fake. Although he was able to reverse the payment through a credit card company, he admits he ignored obvious signs of fraud.

Platforms like cryptocurrency exchange Coinbase and Robinhood have been targeted by attacks that used AI to fake selfie videos and other identity verifications. According to startup Plaid, AI is used in a quarter of all fraudulent attempts to access bank accounts.

Banks and financial companies are actively implementing AI to detect suspicious transactions. Visa has invested $500 million in security technology over the past five years, and JPMorgan Chase has stepped up training its customers to recognize threats. However, experts say, protective measures often lag behind the level of ingenuity of scammers.

During the holiday season, users are advised to remain cautious, avoid suspicious sites, and use multi-factor authentication to protect their accounts.