Artificial Intelligence: A Double-Edged Sword for Older Americans and Their Finances

While AI advancements like online banking, cashless transfers, and immediate customer support through chat offer great convenience, they also open doors to a dark side: financial exploitation or fraud through AI.

First, what is financial exploitation and fraud? Financial exploitation and fraud occur when someone acts in an illegal and unauthorized manner to use someone else’s resources for monetary gain and/or deprives someone of their rightful access to their own assets. This can be creating fraudulent money transfers, setting up a fictious charity to receive donations, changing legal documents (home ownership or estate plans), etc. Exploitation usually involves someone the victim knows, such as a family member or caregiver. Fraud usually is committed by a stranger to the victim.

Financial exploitation and fraud have recently been identified as the “crime of the 21st century” and the most common forms of elder abuse, often going unrecognized or unreported. Perpetrators are specifically targeting older Americans because of their health and wealth demographics, as well as their perceived and real vulnerabilities such as cognitive decline and unfamiliarity with constantly changing technology.

The use of technology in financial exploitation and fraud is not new. However, the recent advances in AI technology and tools now make it easier than ever for criminals to prey on vulnerable people while making it much harder to identify and stop.

Here what financial exploitation and fraud with the help of AI might look like:

Deepfakes and Identity Theft: Imagine receiving a call from a “grandchild” in distress, their voice eerily familiar thanks to AI-powered voice manipulation. Fraudsters can leverage deepfakes to impersonate trusted individuals and trick victims into revealing sensitive information or transferring money.

Personalized “Phishing”: AI can quickly analyze immense amounts of data and create a detailed picture of someone’s online habits, preferences, and anxieties. Armed with this knowledge, fraudsters can craft convincing phishing emails, social media ads, or phone calls that exploit fears or financial needs, making them especially believable.

Automated Fraud Factories: Forget one-off scams. AI can enable large-scale fraudulent operations. Imagine those helpful chat bots instead sending out thousands of personalized phishing emails, managing a network of fake websites, or even manipulating financial transactions–all orchestrated by sophisticated AI algorithms.

Preying on Cognitive Decline: Age-related changes in memory and ability to process complex information can be weaponized by AI tools. With the help of AI, fraudsters might hide crucial details in confusing documents or exploit forgetfulness of their victims to their advantage.

But don’t panic! Just like any technology or tool, AI is neutral. We can harness its power for good while staying vigilant against its potential misuse. Here’s how to protect yourself and your loved ones from financial exploitation and fraud:

• Be skeptical of unsolicited contact: Calls, emails, or messages, even from seemingly familiar sources, require caution. Verify their legitimacy before sharing personal or financial information.
• Never rush into financial decisions: Do your research, consult trusted advisors, and avoid pressure tactics. Remember, legitimate opportunities won’t disappear overnight. Anything that requires urgency should be immediately questioned.
• Stay connected and informed: Learn about common scams and how AI is being used in them. Have honest, open conversations with your support network. Share this knowledge with family and friends, especially those more vulnerable.
• Report suspicious activity: If you suspect a scam, report it to the authorities immediately. Your action could save someone from financial harm.

Remember, awareness is probably the best defense. By staying informed and taking precautions, we can help ensure that AI empowers, not exploits, you and those friends and family members in the silver generation, so that everyone can protect their assets and identities and safely enjoy their golden years.

Visit Modera’s cyber security page for more information on how to help protect yourself and those you care about.