AI fraud: Bank customers lose billions due to fake calls

A dramatic increase in sophisticated banking scams using artificial intelligence is leading to unprecedented losses for consumers. This week, cybersecurity experts and financial institutions issued dire warnings about a new wave of attacks in which criminals use advanced technology to create deceptively realistic communications. The latest data shows a dramatic increase in both the frequency and complexity of these scams—a critical turning point in the fight against financial fraud.

Alarming increase with devastating consequences

Current figures paint a grim picture of the escalating threat. The Identity Theft Resource Center (ITRC) reports a 148 percent increase in identity fraud year-on-year, making these schemes the top fraud target. Financial institutions rank second among the most frequently impersonated business types, accounting for 21 percent.

The financial damage is enormous. The U.S. Federal Trade Commission (FTC) reported that consumers lost over €8.4 billion to fraud in 2023, with identity fraud being the leading cause at €2.3 billion. For individuals, the costs can be devastating: the average loss per victim from bank identity fraud is €2,500, plus the risk of identity theft.

The situation is particularly dramatic for older people: losses of more than 84,000 euros in this age group increased eightfold between 2020 and 2024.

Deepfakes as a new weapon of fraudsters

The increasing sophistication of bank scams is primarily due to criminals' use of artificial intelligence. Fraudsters are now using AI to create deceptively realistic "deepfake" audio and video content, impersonating bank officials or even company executives. These AI-generated messages often appear professional and lack the grammatical errors that used to be telltale signs of fraud.

This technology enables convincing attacks across multiple channels. While phone calls remain common—fraudsters use spoofing technology to pretend they're calling from a real bank number—there's a clear trend toward emails and text messages. These messages often create urgency, for example, by requesting confirmation of a large purchase the recipient never made.

Proven tricks and warning signs

Fraudsters use various tactics to deceive their victims. A common scheme involves a criminal posing as an employee of the bank's fraud department and claiming the victim's account has been compromised. They then instruct the person to transfer funds to a new "secure account"—which is actually controlled by the criminals. Another scam involves tricking victims into revealing their one-time passcodes, which are then misused for instant account access.

Consumers should look out for several warning signs:

• Urgent and threatening language: Scammers often create panic to encourage people to take hasty actions
• Demand for sensitive data: Reputable banks never ask for full passwords, PINs, or one-time passcodes by phone, SMS, or email
• Unusual payment methods: Be suspicious of requests to “protect” money via bank transfer, gift cards, or cryptocurrency
• Suspicious links and attachments: Do not click on links or download attachments in unsolicited emails or SMS messages

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Change in cybersecurity

The rise of AI-powered scams marks a significant shift in the cybersecurity landscape. The increasing realism of these fraudulent communications makes it more difficult for average consumers to distinguish between genuine banking messages and sophisticated scams. The problem is compounded by the fact that some financial institutions use similar communication methods and, in some cases, even request one-time passcodes for verification over the phone—which can cause confusion among customers.

Experts also suspect that current fraud statistics do not fully capture the true extent of the problem. The ITRC believes that a decline in reported identity crimes is due more to a lack of reporting than to an actual decline in numbers.

Outlook: Prevention and increased security

The fight against bank identity fraud will require a multifaceted approach in the future. Financial institutions are encouraged to implement more robust end-to-end authentication solutions that help consumers verify the authenticity of messages. This includes exploring technologies that can add context to authenticated calls—for example, by displaying the bank name and logo.

For consumers, education and vigilance remain the most powerful weapons. The basic advice from banking and security experts is: Be skeptical of unsolicited contact. If you receive a suspicious call, text message, or email, don't respond. Instead, hang up and contact your bank directly using the phone number on the back of your card or on the official website. This simple, independent verification is the most effective protection against bank identity fraud.