Safeguarding R-G Federal Credit Union Members: A Guide to Avoiding AI Financial Scams

Article by Shawn Beltz, Chief Lending Officer

In today's digital age, artificial intelligence (AI) has revolutionized many aspects of our lives, including the financial sector. While AI brings numerous benefits, it also opens the door to new types of financial scams perpetrated by malicious actors.

Credit union members need to be vigilant to protect themselves from falling victim to these scams. Here's a comprehensive guide on how to avoid AI financial scams, what to look out for, techniques utilized by bad actors, and best practices to safeguard credit union members.

Understanding AI Financial Scams: What to Look Out For

1. Phishing Attacks: One of the most common AI-related scams is phishing. Bad actors use AI to craft sophisticated emails and messages that appear legitimate, often mimicking trusted institutions such as credit unions or banks. These messages typically prompt recipients to click on malicious links or provide sensitive information like passwords or account numbers.
2. Fraudulent Investment Schemes: AI-powered investment scams leverage algorithms to promise high returns with minimal risk. These schemes often target inexperienced investors, offering fake investment opportunities or trading bots that claim to predict market trends accurately.
3. Fake Customer Service Bots: Some scammers deploy AI-powered chatbots on fraudulent websites or social media platforms to impersonate customer service representatives. These bots trick users into sharing personal or financial information under the guise of resolving an issue.
4. Identity Theft: AI algorithms can scrape vast amounts of data from various sources to create detailed profiles of individuals. Scammers use this information to steal identities, open fraudulent accounts, or apply for loans and credit cards in your name.

Techniques Employed by Bad Actors

1. Social Engineering: Scammers exploit psychological manipulation techniques to deceive members into disclosing sensitive information or performing actions against your best interests. AI can enhance these efforts by analyzing vast amounts of data to tailor messages that resonate with specific targets.
2. Deepfake Technology: Deepfake technology utilizes AI to create convincingly realistic audio or video clips of individuals saying or doing things you never did. Scammers may use deepfakes to impersonate family, friends, or trusted individuals within a credit union, tricking members into transferring funds or revealing confidential information.
3. Algorithmic Trading Manipulation: In financial markets, bad actors may manipulate AI-powered trading algorithms to create artificial price movements or execute fraudulent trades, leading to financial losses for investors.

Best Practices to Protect Yourself

• Education: You should educate yourself about common AI financial scams, warning signs (such as unsolicited communications, high pressure tactics & requests for sensitive information), and best practices for staying safe online. Regularly reviewing information through newsletters, workshops, and online resources can empower you to recognize and avoid potential threats
• Implement Multi-Factor Authentication: Members should use multi-factor authentication (MFA) wherever possible when accessing accounts online. MFA adds an extra layer of security by verifying a user's identity through multiple factors such as passwords, biometrics, or one-time codes.
• Monitor Account Activity: You should check your accounts online frequently to monitor account activity and identify suspicious transactions. If something looks suspicious you should contact your financial institution immediately.  At RGFCU, you can use CardCommand and Credit Sense which will monitor your transactions and your credit information in real time. These solutions can help you identify unusual transactions or patterns indicative of fraudulent activity, allowing prompt intervention.
• Verify Requests: Verify the legitimacy of any requests for sensitive information or financial transactions, especially if you receive unsolicited communications. Remember to contact the credit union directly using trusted contact information to confirm you are truly speaking with RGFCU.

Protecting yourself from AI financial scams requires a multifaceted approach that combines education, technology, and vigilance. By understanding the tactics employed by bad actors, implementing robust security measures, and being aware, you can effectively safeguard your financial well-being in an increasingly digitized world.