Report: Internet Fraud Has Surged By 44% Due to AI-powered Phishing Scams

In 2024, over 3,700 residents of New York reported cases of online fraud or other internet-related issues, marking a 44% increase from the previous year, according to Attorney General Letitia James’ office.

Internet Fraud Has Surged By 44% Due to AI-powered Phishing Scams

The office highlighted a rise in online account takeovers, where scammers gain access to someone’s account to steal personal information, read messages, access financial details, and even scam friends and family.

Complaints about internet issues ranked as the fourth most common type of consumer complaint received by James’ office in 2024.

Additionally, the office handled over 5,100 complaints related to retail sales. Cybersecurity experts suggest that the rapid rise in internet fraud indicates that tricking victims is becoming easier.

Justin Cappos, a cybersecurity professor at NYU Tandon School of Engineering, stated that as security systems improve, attackers focus on exploiting human weaknesses.

He explained that AI tools have simplified phishing scams, allowing scammers to use synthesized voices that sound very convincing, making it easier to deceive victims into sharing their account information.

Cappos mentioned that it can be challenging for authorities to tackle cybercrimes, noting that they haven’t always been very strict in the past.

He advised consumers to be more cautious when interacting online, especially when receiving calls from unknown individuals claiming to represent organizations.

James’ office emphasized the necessity of using unique, strong passwords for each account, which should include a mix of letters, numbers, and symbols, along with enabling multifactor authentication. Cappos also recommended avoiding text messages for multifactor authentication, as they are not always secure.

Moreover, James suggested that New Yorkers activate notifications for account changes to respond promptly if something unusual occurs and check websites like haveibeenpwned.com to see if their accounts have been involved in data breaches.

In terms of other consumer complaints, issues related to retail sales—ranging from price-gouging to defective products and poor service—decreased in 2024 by around 400 incidents.

James’ office noted a rise in price-gouging for eggs and poultry, with prices for a dozen eggs in the city varying widely from about $4 to over $11 amid a bird flu outbreak.

This price variation is influenced by factors such as whether stores belong to large chains, their suppliers, and their stock levels before recent price hikes.

The office received over 3,800 complaints regarding landlord-tenant disputes in 2024, covering topics like security deposits, evictions, and harassment.

They also raised concerns about deed theft, which is when someone is tricked into giving up their property title, among more than 3,500 complaints about credit, banking, and mortgage fraud.

Recently, James announced the indictment of two individuals in Queens for allegedly stealing a home and $790,000 from a neighbor who was elderly and hospitalized, using forged documents to transfer the property. One of the accused even falsified the neighbor’s will.

A new law that took effect last year officially classified deed theft as a crime and granted the attorney general’s office the authority to prosecute such cases.

Another law implemented in 2023 strengthened civil protections and gave authorities more power to reverse fraudulent sales or halt eviction and ownership disputes.

The attorney general’s office recommended several precautions to prevent deed theft, such as hiring an independent lawyer, having a will, being skeptical of offers to buy back property after transferring rights, and being cautious of fees claimed for loan modifications.

Additionally, James’ office reported receiving thousands of complaints about consumer services, utilities, home repairs, entertainment, and travel services.

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