AI-enabled identity fraud is rising as criminals
increasingly target social media platforms in the lead-up to the 2024 US
presidential election. Recent findings from AU10TIX’s Q3 2024 Global Identity
Fraud Report show a 28% surge in social media-based fraud attacks, up from just
3% earlier this year.

This concerning trend underscores the evolving
sophistication of fraud tactics, particularly as AI-generated bots and deepfake
technology are employed to manipulate public discourse and exploit weak points
in verification systems.

AI-Driven Fraud

The explosive growth in fraud, particularly on social
media, is rooted in the ability of AI to industrialize identity theft.
Fraudsters are using automated tools to create thousands of fake accounts, many
employing advanced generative AI (GenAI) elements to evade detection.

These attacks have reached new heights, with September
marking a peak in fraudulent activity. According to the report, some of these
fraudulent accounts even spread disinformation ahead of the election, adding a
dangerous dimension to online interactions.

The Q3 2024 report highlights a sharp increase in
fraud attempts aimed at social media platforms, particularly those that
incorporate deepfake technologies.

Fraudsters now create entirely synthetic selfies to
match fake identities, bypassing traditional verification methods with ease.
These deepfake “selfies” are now sophisticated enough to outsmart
many automated Know Your Customer (KYC) systems.

Fraudsters vs. Security Systems

The growing use of AI in fraud is creating an arms
race between criminals and companies. AI-driven bots can now launch large-scale
attacks, and the rise in synthetic selfies, completely fabricated using
deepfake technology, is a direct response to increasingly sophisticated security
measures. While AI-powered fraud tools help fraudsters stay ahead, businesses
must adopt equally advanced AI solutions to defend themselves.

Traditional document verification is no longer enough.
Companies need to analyze user behavior and traffic to spot abnormal patterns
and detect fraud. Interestingly, while social media fraud spiked in Q3,
fraud in the payments sector saw a significant drop from 52% in Q2 to 39% in
Q3.

AU10TIX attributes this decline to self-regulation
efforts and law enforcement action, though it notes that criminals are shifting
their focus to less regulated markets like cryptocurrency, which accounted for
31% of all fraud attacks in the third quarter.

Despite these challenges, the payments industry has reportedly
made notable progress in reducing fraud, but crypto remains a growing target.