AI fraud networks exploit UK shoppers amid festive season

AI-driven online fraud poses a significant threat during the busy Black Friday and Cyber Monday shopping periods, with fraud networks reportedly capable of generating GBP £2 million a month using technology costing only GBP £800.

According to data from Sumsub’s upcoming Identity Fraud Report 2024, scams such as Authorised Push Payment (APP) fraud have become increasingly prevalent as fraudsters exploit trust between victims and fake service providers, making scams difficult to detect. Last year between November 2023 and January 2024, individuals in the UK lost over GBP £11.5 million to these scams, with the average loss per victim standing at GBP £695.

Sumsub’s report illustrates the growing sophistication of fraud networks and the increasing threat they pose through the use of AI and deepfakes. Deepfake fraud demonstrated a 118% increase in 2024 from the previous year, with global figures rising to 300%. Additionally, one in every 100 online platform users globally was part of a fraud network over the course of the year. On average, businesses reported financial losses of approximately GBP £240,000 per fraud incident.

Martin ten Houten, Vice President of Business Development in Europe at Sumsub, highlighted the holiday season’s vulnerability to scams: “This holiday season is a hotspot for scams, and shoppers should be aware; but the worrying growth of scams and fraud in the UK and further afield isn’t limited to this period. Fraud is growing worldwide – and thanks to AI, deepfakes, and the growing sophistication of fraud networks, it’s now more of a threat than ever before.”

Vyacheslav Zholudev, Chief Technology Officer at Sumsub, underscored the challenges posed by new technology: “Fraudsters are not only leveraging cutting-edge technologies like AI and deepfakes but are also exploiting gaps in identity verification systems that were once considered robust. The accessibility of tools that automate fraud, combined with the increasingly blurred lines between legitimate and fraudulent identities, means that businesses must move beyond traditional KYC measures. To stay ahead, we need to integrate more dynamic, real-time intelligence, continually adapting to the ever-evolving fraud landscape.”

The report details that 67% of companies surveyed reported an increase in fraud activities, and 79% of consumers believe that both governments and businesses should share the responsibility of protecting users from fraud.

Sumsub’s analysis, which includes data from over three million real-life fraud attempts and insights from more than 1,000 end-users and 200 fraud and risk professionals, presents a comprehensive look at the current fraud landscape.

To combat the threat of deepfakes, Sumsub advises the public to observe features such as unnatural movement in videos, changes in lighting and textures, and unusual blinking or poor synchronisation in speaking dynamics. They also encourage the public to limit the sharing of personal photos online and to utilise technology, including AI, for detecting inconsistencies in media authenticity.