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AI versus AI in the Rising storm in AI credit card fraud

These scams have a significant impact on credit card
battle against credit processing. They lead to financial losses for individuals
and businesses and undermine trust in digital payment
card fraud systems. The increasing sophistication of these scams
makes them harder to detect and prevent, posing a
significant challenge to individuals, businesses, and
financial institutions. As such, a pressing need exists for
robust, practical solutions to combat AI fraud and scams
in credit card processing.

Yet the very technology that powers these scams also
provides the solution. AI's capacity to sift through vast
data, spot patterns and learn from past events makes it a
powerful tool for detecting and stopping fraud.
By Elie Y Katz AI is becoming a strong ally in the fight against AI-driven
National Retail Solutions fraud. When organizations integrate AI fraud detection
tools with current systems, they can significantly improve
I fraud and scams have significantly risen, with their fraud detection and prevention, protecting their
25 percent of global respondents experiencing operations and customers. More than 63 percent of
AI voice-based scams, industry researchers recently queried financial institutions using AI indicated
A have found. In 2022, fraud rates against contact they believe it can stop fraud before it even occurs.
centers increased by 40 percent, and Americans lost nearly
$9 billion to fraud, marking an over 150 percent increase Big banks turn to AI for help
in just two years. Investment fraud alone accounted for
losses of $3.82 billion, a 128 percent increase over 2021. Several leading financial institutions have successfully
In India, 83 percent of victims of AI voice scams reported implemented AI to combat credit card fraud. Mastercard,
monetary losses. for instance, uses its Decision Intelligence technology, an
AI-driven system that analyzes cardholders' historical
The extent of AI fraud and scams, specifically in credit shopping and spending habits to set a behavioral
card processing, is alarming. Recent data revealed over baseline. The system uses this baseline to compare each
389,000 reports of credit card fraud to the Federal Trade new transaction, actively detecting anomalies that might
Commission (FTC) in 2021. On a global scale, credit card suggest fraud.
fraud resulted in over $32 billion in losses in the same year.
Similarly, SEB Bank uses AI to analyze customer behavior
Double-edged sword driving innovation and fraud and identify anomalies that may indicate fraudulent
activity, enabling the bank to detect and prevent fraudulent
AI-driven scams have evolved in sophistication, leveraging activities in real-time. JPMorgan Chase also employs AI to
advanced technologies to carry out fraudulent activities. analyze customer data and identify potential fraud cases.
One of the most common forms of AI-driven scams is The bank's AI model has demonstrated high accuracy in
phishing, where fraudsters use AI to generate convincing detecting fraudulent activities, significantly reducing the
emails, tricking recipients into revealing their credit card number of false positives.
information.
AI-based fraud detection has advantages over traditional
Another prevalent scam known as vishing involves using methods, especially in credit card processing. AI's real-
AI to clone voices. In these scams, criminals impersonate time monitoring, data integration and continuous learning
trusted individuals over the phone, persuading victims to make it a strong ally in the fight against credit card fraud.
disclose sensitive information or carry out transactions
that result in financial loss. But remember, AI isn't a standalone solution. It works best
when used alongside traditional methods. Combining
ChatGPT users have ingeniously leveraged AI to bypass both strengths can create a robust defense against credit
paywalls on news sites. They provide the chatbot card fraud. As we look to the future, AI's role in fraud
with links to articles. Following its programming, the detection will only grow, opening up new ways to secure
chatbot retrieves the text from the linked articles, even our financial systems and protect us from fraud.
those behind paywalls, and presents it to the user. This
workaround has proven effective, demonstrating how AI
can navigate digital barriers. As a result, the research and Elie Y. Katz is founder, president and CEO at National Retail Solutions
development company OpenAI suspended ChatGPT's (NRS), https://nrsplus.com. Contact him by phone at 201-715-5179 or by
web browsing capabilities. email at ekatz@nrsplus.com.
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