BLOG: Deepfakes, Metaverse and future fraud threats to watch out for

The current cost of living crisis will make people more vulnerable to fraud. As technology evolves and crooks seek to exploit vulnerabilities, what fraud trends and potential threats for the future might we see?

The UK, like many countries, is in the throes of a cost of living crisis that has not been seen in decades. Many will be preoccupied with their finances, with tougher challenges ahead when energy prices and inflation climb even higher.

But the cost of living is only a pertinent question. Fraud is another. And the current economic climate is ideal for fraudsters.

Fraud is becoming more and more common

In the UK alone last year, fraud losses totaled £137 billion. This growth is the result, at least in part, of our increased use of digital services, including digital banking, throughout the pandemic. In fact, the first half of 2021 saw a 285% increase in online fraud compared to the previous year. And as technology advances, criminals update their tactics – we need to respond with greater vigilance and greater awareness of the threat at hand.

One of the most common types of fraud in the UK is Authorized Push Payment (APP), totaling £582.3 million in 2021. Essentially, this is where a customer is tricked into authorizing a payment on behalf of a criminal. This volume of crime is propelled by the sophisticated talent of fraudsters to trick people into divulging personal information or transacting with fraudulent companies and accounts.

The bumbling phishing scammer has been spoofed by scammers who know how to pose as an official from your bank, NHS or service provider. Some will even use long-term role-playing games where they pretend to befriend someone online and then manipulate their trust.

Staying safe online is hard these days. As our reliance on the digital world continues to grow – for the way we shop, communicate, bank and manage our lives – we are exposing ourselves to ever greater threats. Here are two potential applications for the APP that are expected to become more mainstream in the months and years to come.

Wrong wrong

Some readers will have seen the bizarre deepfakes of political leaders online over the past few years – Barack Obama shared one to raise awareness about the issue. Since then, the technology has become extremely sophisticated and has even made its way into the entertainment industry, where actors can now appear as themselves 40 years younger.

If you don’t know, deepfake technology is basically an extremely realistic “fake video”, which makes it look like someone is communicating in real life. These videos are made with advanced programming that compiles all available videos and recorded footage of the person they are trying to recreate; with more footage comes a more realistic and “true to form” result. Once a basic model of a person is built, with today’s technology, new phrases can be programmed for the “wrong” to say.

Social media has provided a conducive landscape for fraudsters to exploit people using deepfake videos. Particularly if targeting young people, fraudsters could potentially access hours of recorded footage to create the perfect “fake” model of their target.

So what does it look like in real life? It could be a parent or grandparent receiving a video message from a child or grandchild asking them to send “emergency” money to their newly acquired bank account. created. Or a fraudster could mimic the voice of someone’s GP asking for personal information over the phone. It seems likely that more sophisticated methods like these will become more common in the not too distant future.

A change in our relationship with social media may be necessary to deal with this threat. For example, checking and updating your social media privacy settings might be a good place to start, if you haven’t already.

Imposters in the Metaverse

Advances and the proliferation of technology have changed – and will continue to change – the way we interact. We are heading towards a future where digital interactions can feel as dynamic and immersive as in real life. This is the premise of the Metaverse, a creative platform for virtual reality experiences.

As the metaverse progresses and gains traction in society, fraudsters will be attracted to this new digital realm.

In fact, this is already happening today. Criminals present themselves online as genuine individuals looking for friendships or more, and then exploit those relationships for financial gain. Such schemes are known as impostor scams.

A future metaverse in which users can portray themselves as whoever they want while feeling as authentic as real life will provide a playground for impostors. While the Metaverse may be far away, the threat is present today. Interactions with strangers online – even people we know – should be handled with care. Never divulge financial details online, not even to your own mother – she may well have been the victim of a hacking attack.

It is extremely important to stay alert to these ever-evolving threats. With just these two examples, we can see that it will become more difficult for consumers to personally detect fraudsters as technology improves. While already thriving, APP crime is likely to become even more prevalent as deepfake technology expands and the metaverse invites us to share our lives online. The only way to combat this is to be vigilant. We all need to become more digitally responsible and remember that online, not everything is what it seems.

Sean Lynskey is Chief Operating Officer of Digital Banking, Chetwood Financial

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