The rapid rise of artificial intelligence (AI) technology offers many benefits, but it seems that scammers are learning how to exploit this technology as well.
A FOIA request to the Federal Trade Commission has revealed just how extensively AI is being used to con American consumers out of money.
Key Takeaways
- Americans lost over $108 million to scams involving AI over the last year.
- 45% of AI fraud scams led to financial losses, with the average loss being $14,600.
- The biggest losses came from investment-related scams ($67m), imposter scams ($16m), and business and job opportunity scams ($3.4m).
45% of AI fraud scams resulting in a financial loss is significantly higher than average. In comparison, only 28% of total fraud scams in 2023 resulted in a loss.
AI technology such as deep fakes and voice cloning can make scams much more convincing, helping to explain the higher success rate.
AI Scams Over Time
The number of AI scams increased steadily throughout 2023 and into 2024, with double the number of reports made in July 2024 compared to July 2023.
Money lost to AI scams reached an all-time high in July 2024, at just under $13 million.
AI Scams By Category
| Category | $ Loss (AI) | % Of Reports With Losses (AI) | Average $ Loss (AI) | % Of Reports (AI) | % Of Reports (Total) |
|---|---|---|---|---|---|
| Investment Related | $66,941,915 | 73.7% | $54,691 | 15.3% | 2.0% |
| Imposter Scams | $16,049,096 | 32.8% | $16,033 | 12.5% | 15.8% |
| Business and Job Opportunities | $3,400,903 | 34.6% | $10,762 | 3.9% | 2.0% |
| Online Shopping and Negative Reviews | $2,106,868 | 80.1% | $898 | 29.2% | 6.8% |
| Auto Related | $1,360,869 | 44.7% | $17,011 | 1.0% | 3.3% |
| Education | $904,761 | 27.9% | $22,067 | 0.5% | 0.3% |
| Internet Services | $704,196 | 33.3% | $1,196 | 7.3% | 1.8% |
| Prizes, Sweepstakes and Lotteries | $504,443 | 42.2% | $6,385 | 1.0% | 2.9% |
| Computer Equipment and Software | $420,285 | 48.6% | $2,021 | 2.6% | 0.39% |
| Banks and Lenders | $408,523 | 5.3% | $7,856 | 0.6% | 4.27% |
By far the most costly AI scams are investment-related, with 74% of victims losing some money, and an average reported loss of just under $55,000.
Imposter scams are the second most costly type of AI scam, with Americans losing over $16 million in a year.
Within imposter scams, the business imposter and romance scam subcategories are the most costly, each causing losses of over $5 million dollars.
The most common type of AI scams are online shopping and negative review scams, and 80% of reports involved a financial loss. However, the average loss in this category is lower than others at just under $900.
Online shopping scams account for a much higher percentage of AI scams compared to the average, potentially due to the ease of setting one up. All the scammer needs to do is use AI to create an image of a fake product, and then start selling it.
Investment and internet service scams are also over-represented within AI scams.
AI Scam Victims By Age
Now let’s have a look at age.
| Age Range | % Of AI Scam Reports | % Of Total Scam Reports | Average $ Loss (AI) | Average $ Loss (Total) | % Of Total Losses (AI) | % Of Total Losses (Total) |
|---|---|---|---|---|---|---|
| 19 and Under | 2.3% | 2.6% | $478 | $3,867 | 0.1% | 1.1% |
| 20 – 29 | 14.4% | 14.0% | $2,540 | $6,477 | 2.1% | 9.0% |
| 30 – 39 | 19.6% | 17.9% | $9,972 | $10,421 | 11.0% | 16.7% |
| 40 – 49 | 18.2% | 15.6% | $15,876 | $12,600 | 20.0% | 17.6% |
| 50 – 59 | 16.9% | 15.0% | $27,839 | $14,662 | 25.5% | 17.2% |
| 60 – 69 | 16.8% | 17.7% | $27,131 | $16,943 | 25.0% | 19.5% |
| 70 – 79 | 9.4% | 12.8% | $34,745 | $19,382 | 15.4% | 14.0% |
| 80 and Over | 2.4% | 4.3% | $15,221 | $22,878 | 0.9% | 4.9% |
Consumers aged between 30-39 are the most likely to fall victim to an AI scam, mirroring the overall pattern seen for total scam reports.
But they are much less likely to lose money on AI scams compared to average, accounting for only 11% of the total money lost compared to 17% on average.
Older consumers aged 60+ are less likely to report falling victim to an AI scam than average, possibly because they’re less engaged with social media, the internet, and apps, where lots of AI scams originate.
But when an older consumer does fall for an AI scam, the financial impact is substantial, with average losses exceeding $27,000 for 50-79 year olds.
Mark, Co-Founder of Authority Hacker, gave his advice on how to avoid falling victim to an AI scam:
AI offers many benefits, but it also poses risks, especially to vulnerable groups like the elderly. They are increasingly targeted by AI-driven scams involving fake images, texts, audio, or videos.
As these scams become more sophisticated, they are harder to detect. Raising awareness and educating people on how AI works is crucial for spotting potential fraud.
Verifying unusual requests through trusted channels is vital. If asked to send money or share sensitive information, always double-check by contacting the person directly using a known method. Pre-arranged safe words can help confirm identities. Staying vigilant helps protect against evolving AI scams.
A FOIA request was made to the Federal Trade Commission asking for all the reports they’d received that involved Artificial Intelligence.
The data received spanned a timeline of 1/1/2023 to 31/7/2024.
Apart from the graph over time, the data used for the analysis is dated between 1/08/2023 and 31/07/2024. This is one year’s worth of data.
For category analysis, the average reported losses are worked out based on only reports that reported a financial loss.
For age analysis, the data was filtered to fraud scam reports which included age (68% of all reports).
Data on total scams was sourced from the Consumer Sentinel Network Data Book 2023.
