BY TERRI LUTTRELL, CAMS-AUDIT, CFCS, COMPLIANCE AND ENGAGEMENT DIRECTOR, ABRIGO As artificial intelligence (AI) continues to advance, fraudsters are leveraging these tools to exploit one of the most vulnerable groups in our communities, older adults. According to the FBI’s Internet Crime Complaint Center (IC3) data, there were $4.88 billion in losses from seniors in 2024. These numbers continue to trend upwards, and the rise of AI-driven elder fraud presents new risks to victims and financial institutions. AI-driven elder fraud involves scams that use artificial intelligence to make attacks against older adults more convincing, harder to detect and easier to carry out on a large scale. The increased threat requires both awareness and proactive mitigation by banks and credit unions to protect clients and maintain trust in their communities. The Evolving Tactics Behind Elder Financial Exploitation Historically, seniors have fallen victim to fraud schemes such as phishing, romance scams and complex investment schemes. Today’s fraudsters are taking scams to a new level by using generative AI tools — such as deepfakes and voice cloning — to impersonate loved ones and create compelling, urgent scenarios. A deepfake is a video, photo or audio recording that seems real but has been manipulated with AI. Perpetrators often extract voices from social media videos or manipulate photos to craft believable messages. These AI-powered deceptions can lead to hurried decisions by victims, resulting in panicked wire transfers, large cash withdrawals or the sharing of sensitive account credentials. In an example of an AI-enhanced grandparent scam, a fraudster might scan public social media profiles to learn a grandchild’s name, see that they are vacationing abroad and note that they call their grandparent “Nana.” Using a voice-cloning tool and this easily accessible personal information, the scammer can generate a frightened phone call from the “grandchild” claiming to be in legal trouble and urgently needing bail money. The voice’s realism and details make it alarmingly easy to convince the victim to send funds immediately, without stopping to verify the story. The nature of AI-driven elder fraud has made it more difficult to detect using traditional red flags. What once might have seemed suspicious can now appear legitimate, making staff training and innovative detection systems even more essential. What Financial Institutions Can Do Now Banks and credit unions are uniquely positioned to safeguard older adults through technology and personalized service. Here are some key actions institutions can take to prevent their clients from becoming victims: • Employ Robust Fraud Detection Software: Enhance fraud monitoring systems to flag unusual activity on accounts held by older adults, typically aged 60 and above. Use tailored parameters to detect anomalies like sudden large wire transfers, frequent ATM withdrawals or new payees that do not align with the client’s typical behavior. These targeted settings improve your institution’s ability to catch early signs of AI-driven elder fraud and take timely action. • Train Employees To Recognize New Scams: Equip front-line staff and fraud teams with practical training to identify signs of AI-driven elder fraud. These signs can include clients AI-DRIVEN ELDER FRAUD Deepfakes: The Newest Threat 10
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