AI makes it easier for fraudsters to create fake companies, hamper due diligence: report

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A report by the ACFE and Thomson Reuters found that companies are concerned about being duped by fraudsters' synthetic businesses that are easier than ever to fake with generative AI.

I/O Fund CEO and lead tech analyst Beth Kindig provides insight on stock performance and the development of AI on Making Money.

"Organized crime rings are sophisticated and typically they’re ahead of the curve on the adoption of any new technology," Dori Buckethal, vice president of Thomson Reuters Risk & Fraud Solutions, told FOX Business. "What we’re seeing with synthetic identity at fictitious businesses is that generative AI and machine learning can replace what was once done with a very manual process within criminal organizations.

Buckethal explained that companies are concerned about the reputational damage of doing business with a fraudulent entity, in addition toif they’re found to be working with sanctioned individuals or business entities. Furthermore, the dollars lost by companies to fraud hurt shareholders and their stakeholders.

One of the most common types of fraud is known as business email compromise, which involves a fraudster spoofing the email of a legitimate business. For example, in the real estate industry, if a criminal knows a financial transaction will occur at a certain time, they’ll attack the company in advance to change a routing number to send a payment to their fraudulent account.

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