This is worrisome news.
Emerging generative AI technologies are fueling a dramatic rise in online scams and fraud, with devastating financial consequences for U.S. consumers, especially seniors, a new report from the Consumer Federation of America, or CFA, shows.
“Tech companies are failing to appropriately moderate and mitigate the way their Generative AI tools are being used to supercharge scams and fraud,” Ben Winters, director of AI and privacy for the CFA, a consumer advocacy group, said in a statement.
The amount of money lost from internet crime is skyrocket, Winters said.
“It’s irresponsible and unacceptable for companies to facilitate false content creation aimed at impersonating, defrauding, and blackmailing the average consumer without robust moderation and harm mitigation efforts,” he said.
Winter contends that the “self-regulation” companies want is giving a weapon to bad actors to make scams easier to do, harder to track, and more common.
The report describes how Americans lost more than $16 billion to online scams in 2024, a 33 percent increase from 2023. Seniors lost nearly $5 billion, a figure likely much higher due to underreporting.
The CFA report shows how generative AI is transforming scam tactics making phishing, impersonation, extortion, and identity theft more targeted, believable, and difficult to detect. Whether it’s chatbots generating flawless phishing emails or voice-cloning tools mimicking loved ones in distress, AI is accelerating the reach and realism of fraud.
The report also describes the “scam stack,” outlining how a web of underregulated technologies, from data brokers and robocalls to social media platforms and payment systems, work in tandem to enable wide-spread, skyrocketing scams.
As the result of its report, the CFA is calling for stronger safeguards, corporate accountability, and fast regulatory action to protect consumers due to the rapidly evolving threat.
Tips for consumers from the report include:
- Report your experience.
- Stay aware of the current scams and bad practices.
- Talk about it with others.
- Pause and verify.
- Resist more invasive methods from entities you don’t already trust.
Remember, an alert, informed consumer is the best protection against fraud.
