Congratulations to Zita Huang on her winning entry for the 2024 Haywood Hunt & Associates Inc. Annual Scholarship. This was the 7th year of our scholarship and we’d like to thank everyone who submitted well-researched and well-written essays again this year. Check back soon on the details of our 2025 scholarship!
2024 Scholarship Winning Entry: By Zita Huang
Many often fear Artificial Intelligence and Fraud as separate entities, but the intersectionality between both fears can be devastating to the security of people worldwide. Whether it be phishing emails, spam calls, misleading services, or even extortion scams, the advancement of Artificial Intelligence will perpetuate online fraud worldwide. A 2022 Statistics Canada report found that fraud cases rose from 79,000 in 2012 to 150,000 in 2022, a nearly 90% increase (Government of Canada, 2024). With the recent development of artificial intelligence tools, fraud-related crimes will undoubtedly rise significantly. Deloitte’s Centre for Financial Services believes that fraud-related losses will be valued at USD 40 billion by 2027 in the United States alone due to the rise of A.I. used in fraud-related crimes (Lalchand et al., 2024). As Artificial Intelligence and Online Fraud continue to advance, Canadians and all levels of government must do their due diligence to ensure they are protected from fraudsters through education and awareness, particularly among seniors, using fraud prevention tools, A.I. spam detection tools, and accessible ways to report fraud.
Education and Awareness
One of the main contributors to the rise in fraudulent activities can be traced to the lack of awareness. As Artificial Intelligence progresses, criminals are quickly implementing different unique ways to steal money and personal information daily from Canadians and Canadian businesses. In 2024 alone, there have been 15,941 confirmed fraud victims, with a total of $284 million lost (Canadian Anti-Fraud Centre, 2024). Fraud awareness and education apply to everyone, as anyone could fall victim to fraudulent activities. However, Canadian seniors have become the prime target for Online and Telephone Fraud, with 13,000 reports and $83.6 million in losses relating to elderly fraud victims (Canadian Anti-Fraud Centre, 2022). As some seniors reside alone or in retirement housing, it can be difficult for them to recognize fraudulent activities. Financial institutions can be crucial in preventing fraud among seniors, especially if banking services become more accessible to Canada’s elderly, whether by priority telephone banking or accessible infrastructure at various in-person branches. As Canadian seniors prefer in-person banking, financial institutions must ensure that seniors are constantly reminded to stay aware and cautious of fraudsters.
How to Spot Fraudulent Activity
Other forms of online fraud that utilize artificial intelligence include deep fakes, voice cloning, and impersonations that promote fake products or services. It is important to be mindful and look for signs of fraud; this includes:
- Spontaneous emails, phone calls or text messages that instill fear or urgency and ask for personal information
- Check for improper grammar, spelling errors or unprofessional language
- Claims to be from a financial or governmental institution and require personal information immediately
- Phone calls with artificial-sounding voices
- Suspicious fonts, logos and websites
- Be cautious of website links and file attachments
- Research the validity of the company or the individual
- International area codes
If anyone is unsure if the call is legitimate, especially if it pertains to a financial institution, individuals should not provide their personal information and instead call their banking service provider’s main customer service line.
Utilization of Fraud Prevention Tools
For Canadian businesses, client information must be protected from fraudulent activities. According to a Microsoft Report, 99% of compromised accounts did not implement multi-factor authentication, making those accounts vulnerable to phishing and password reuse (Microsoft, 2024). Implementing multi-verification systems, sent by message or email, can be an added layer of protection against fraud. Another method used for fraud prevention is voice authentication. Many Canadian financial institutions, such as T.D., BMO, and CIBC, have utilized voice authentication for their tele-banking services. Clients can use a combination of Multi-Factor Authentication Methods to optimize and secure their financial accounts.
A.I. Scam Detection Methods
Scam call and text message detection is slowly advancing as time progresses. The development of such detection technology can prevent the most vulnerable Canadians from falling victim to fraudulent calls and text message communications. The Google Spam Screening and Protection System, for example, allows Google Pixel Cellular devices to screen unknown phone calls on behalf of the user. The system will determine whether or not the call is fraudulent before informing the user. Users can decide whether or not to block all calls the screening system deems fraudulent.
Accessible Ways to Report Fraud
Although the statistics show the prominence of fraudulent activities, fraud is one of the least reported forms of crime, with its reporting rate being less than the average reporting rate of all crimes (29%) (Statistics Canada, 2024). As such, accessible ways to report fraudulent activities must be achieved to support fraud victims. According to Statistics Canada, marginalized Canadians, including Indigenous, francophones, immigrants, and LGBTQ2+ communities, are either less likely to report fraud or are more likely to become fraud victims (Perreault, 2023). As such, the government, law enforcement, and financial institutions must do their due diligence and actively communicate their fraud reporting services to their clients regularly. The Canadian Anti-Fraud Centre, in particular, must spread awareness of fraud prevention and its fraud reporting services. These institutions should also implement procedures to ensure fraud reporting can be accessible to all Canadians, whether that is accommodations for those with visual and hearing impairment, seniors or those who face language barriers.
References
Government of Canada. (2024, February 16). Secure your accounts and devices with multi-factor authentication. Canadian Centre for Cyber Security. https://www.cyber.gc.ca/en/guidance/secure-your-accounts-and-devices-multi-factor-authentication-itsap30030
Government of Canada. (2024, March 4). The rise of AI: Fraud in the digital age. Canada.ca. https://www.canada.ca/en/competition-bureau/news/2024/03/the-rise-of-ai-fraud-in-the-digital-age.html
Government of Canada, Royal Canadian Mounted Police. Canadian Anti-Fraud Centre ANNUAL REPORT 2022. (2023). https://publications.gc.ca/collections/collection_2024/grc-rcmp/PS61-46-2022-eng.pdf
Lalchand, S., Srinivas, V., Maggiore, B., & Henderson, J. (2024, June 7). Generative AI is expected to magnify the risk of deepfakes and other fraud in banking. Deloitte Financial Services. https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-predictions/2024/deepfake-banking-fraud-risk-on-the-rise.html
Microsoft. Security at your organization: Multifactor authentication statistics. (2024, August 19). https://learn.microsoft.com/en-us/partner-center/security/security-at-your-organization
Perreault, S. (2023, July 24). Self-reported fraud in Canada, 2019. Statistics Canada. https://www150.statcan.gc.ca/n1/pub/89-652-x/89-652-x2023001-eng.htm#
Statistics Canada. Police-reported crime statistics in Canada, 2023. (2024, August 21). https://www150.statcan.gc.ca/n1/daily-quotidien/240725/dq240725b-eng.htm