AI to ‘turbo-charge’ fraud unless further action is taken, think thank reports

The Social Market Foundation (SMF) has called for Prime Minister Rishi Sunak to tackle fraud during next week’s AI summit. 

A briefing by SMF has called for a new “whole eco-system” approach at the heart of its proposed agenda to beat fraud. 

It argues that measures addressing the threats posed by AI must be part of this as the technology could llow fraudsters to generate “synthetic content” such as deepfakes for “spear phishing” and “social engineering” purposes.

The organisation said the country is “in the midst of a fraud emergency”, with nine per cent of the UK population falling victim to fraud in 2021-22, at an overall cost of more than £12bn to the economy.

Richard Hyde, researcher at the SMF, said: “Whilst it is promising that the prime minister is looking to lead on AI safety, the threat of fraud needs to be part of that debate. Tools such as AI are highly likely to be exploited by fraudsters for malevolent ends. 

"Therefore any serious effort to ensure AI is safe has to encompass safety from crime enabled by it. This requires having the right approach and infrastructure in place to combat the current fraud emergency and create a strong foundation on which to face the new threats. 

“Given the international dimension to much of the fraud that is perpetrated against the people of the UK and the fact that AI is going to turbo-charge the fraud threat, the summit represents an unmissable opportunity for the international community to get ahead of the AI-fraud challenge, in contrast to the slow and inadequate efforts made against the current fraud emergency.” 

In partnership with StopScams UK, SMF hosted two roundtables earlier this year, which saw experts conclude that, despite being a step forward, the UK Government’s fraud strategy fell short of tackling the issue.

Roundtable members included politicians, policymakers, and regulator representatives from the financial, telecoms and technology industries as well as consumer and business cohorts. 

Discussing what measures the government should implement going forward, most agreed on the need for better cooperationwithin the fraud chain and between private and public sectors , underpinned by sharing of data.

Other actions included financial services building a more preventative approach, as well as raising “fraud hygiene” awareness amongst the public. 

However, the document also listed several obstacles which may prevent the strategy from succeeding, including regulation on levels of data sharing as well as diverging opinions on the priority given to the issue.

The paper also suggested “a lack of” leadership is a core hindrance and warned the new strategy would require fraud to be treated as a top political priority to succeed. 

Ruth Evans, chair of Stop Scams UK commented: “Scams and fraud impact us all with almost £600m stolen by fraudsters from UK consumers in the first six months of this year alone. For too long the policy framework around fraud and scams has failed to keep pace with changes in technology and the proliferation of new scam types. 

“This report, commissioned by Stop Scams UK, makes a vital contribution to the policy debate. 

It sets out the pressing need for a whole eco-system approach, built around clear leadership from the government and the better coordination of industry action, and underpinned by the seamless sharing of data between firms and across sectors. Stop Scams UK’s pilot projects have started to light the way for cross-sector data sharing. This report shows just how urgent that work is and how much more there is to do.”