Social engineering, deep fakes and AI used in growing digital fraud
· Citizen
Credit card fraud and social engineering have delivered another getaway vehicle for criminals, with gift vouchers being used to move and launder stolen money.
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This is because it makes it more difficult to trace who ultimately benefits from the crime.
Vouchers prevalent means laundering
IRS Forensic Investigations’ Chad Thomas said vouchers had become a prevalent means of laundering money, particularly as scrutiny of conventional banking transactions has increased.
The fraud can start with a stolen credit card or successful social engineering attack before the proceeds are converted into retail or digital vouchers and moved out of reach.
“It is a tool for money laundering and it’s not just retail gift vouchers. It’s music, betting and almost any other voucher you can imagine. It’s not just in retail stores, it’s vouchers that are available online,” Thomas said.
The attraction for criminals is their semi-anonymous nature, he added.
Thomas said tighter financial controls and increased scrutiny of bank accounts had made it more difficult to disguise the origins and movement of illicit money through traditional channels.
South Africa’s efforts to strengthen its financial crime controls and exit the Financial Action Task Force greylist had contributed to greater scrutiny, forcing criminals to find alternatives.
Greater scrutiny force criminals to find alternatives
But vouchers are only one component of a rapidly growing digital fraud economy. Thomas said estimates placed the annual increase in cyber-related and digital fraud at around 40% globally, with older and less digitally savvy people among the easiest targets.
Criminals exploit trust as much as technology, often using sophisticated banking terminology and information about their victims to create the impression that a call is legitimate.
“When you get told an OTP has been sent to your phone and you’re now getting used to this new digital age, you expect that an OTP can only be sent by your banking organisation,” he said. Once the victim hands over the OTP, criminals can gain the access they need.
The problem is becoming more sophisticated as artificial intelligence and deepfakes provide fraudsters with new tools.
Thomas said there had been cases where victims believed they were speaking to their grandchildren, who supposedly needed money urgently after an accident. The voice at the other end, however, was fake.
“It’s not their child or their grandchild on the other end of the phone. It’s been engineered,” he said.
Deep fake children and grandchildren
Such scams require preparation, including obtaining voice samples, identifying relatives and understanding whether the intended victim had access to money.
Fraudsters then simply need a convincing explanation for why the supposed family member was calling from an unfamiliar number.
Thomas said this was precisely why victims should not simply be dismissed as gullible. Professional criminals spent their lives learning how to manipulate people and were often exceptionally good at it.
“If you’re a criminal and you’ve chosen to follow that path, you’re damn good at what you do, and that’s why we call them con artists. They’re convincing and they’re confident,” he said.