Greetings from FrankonFraud,

As I have often said, AI is amazing. But every week, there seems to be a new wrinkle in how the bad guys use it. From deep fakes to exploiting credit bureaus to aiding scammers, it’s happening all around us.

Here are the top stories and exciting things in fraud this week 👇

• CEO Deepfake AI Hits Bunq Bank

• Dangerous new AI could turbocharge Sextortion scams

• Mortgage fraud hits 78 basis points in 2023

• Michael Lewis is an SBF FanBoy

• Credit Sweepers Turn To AI

• AmFirst Bank attacked after upgrade

• A Burger Bailout Caper at Hardees

• Dozens of Malaysians Trafficked to Scam

• Amex Pilots Biometrics for Online Checkout

Let’s get to some of the top stories now.

CEO AI DeepFake Has Arrived - Online Bank Bunq Hit

An employee at online bank Bunq received a WhatsApp message from his CEO Ali Niknam last week. 'Hey, I'm traveling, we just completed a company takeover, we need to make a down payment quickly or the deal won't go through,'”

The employee than received a video call request and answered it. When he did, there was Ali.

The video was “blocky” due to a poor connection but good enough for the CEO to ask the employee to transfer funds quickly.

After the video call ended, the employee called Ali directly and then learned the entire video call was a hoax.

While this was a failed attempt, we know one thing. These AI deepfakes improve dramatically over time.

Dangerous New AI - NudeFusion - Could TurboCharge Sextortion Scams

A disturbing new AI tool launched last week called NudeFusion which is a free online tool that lets users convert any picture to nudes. Advertisements and post for the new AI appeared all over X (formerly Twitter)

A user simply uploads a picture and AI promises to be able instantly transform it into a naked image of that person.

This site just came out and it’s hard to tell how genuine it is. If it is real, it’s bad news.

Earlier this year, the FBI alerted Americans that criminals increasingly turn to AI to assist them in Sextortion scams.

Criminals will take pictures from Social Media and use Artificial Intelligence to doctor the pictures, even going as far as using pictures of children.

You can check out the website by clicking here, but beware that some imagery is NSFW.

PPP Fraud Used To Fund Millions In Gun Purchases for Violent Gangs

A new report by the Chicago Sun Times reveals that COVID fraud caused massive inflation in illegal gun sales as the money poured into violent gangs.

The price of illegally sold “Street Glock handguns” for example went from about $700 to more than $1,000 during the pandemic. Criminals could care less about the high prices of the guns as they had millions in fraud funds to make the purchases, no matter the price.

The Times investigated 15 Federal Gun cases and found many of the guns were associated with gang members that took out PPP loans during the pandemic.

Mortgage Fraud Rate is 78 Basis Points - Fraud Fighters Are On Alert

With credit and debit card fraud rates hovering between 5 to 7 basis points it’s hard to understand why such a safe industry like mortgage has 10 times the level of fraud.

But CoreLogic’s Fraud Index (which tracks the level of fraud across the industry) indicates that about 1 out of every 134 mortgage applications contains fraud.

With $1.5 Trillion in mortgage loans for this year, that means about $11.7 billion in fraud will be perpetrated against banks this year.

With interest rates rising, fraud is becoming more costly causing fraud fighters and underwriters to scrutinize loans more carefully.

Fraud Fighter Bridget Berg says this 👇

If you want to read a comprehensive report on mortgage fraud in 203, you can read the latest CoreLogic report by clicking the image below or this link.

AmFirst Has Nightmare Upgrade As They Get Hit With Fraud Attack

Last week, AmFirst implemented a system upgrade they had worked on for 2 years.

Evidently, when the CEO posted this system upgrade notification on YouTube, it must have caught the attention of fraudsters.

The upgrade allowed customers and users to view all their accounts online with a single login.

On the day of the upgrade, Telegram lit up with fraudsters wanting their accounts and the bank was subsequently attacked with fraudulent withdrawal activity.

Click on This Link Or Image Below To Read The Blog

Credit Repair Turns To AI To Industrialize Credit Sweeps

Credit Repair companies have always relied on cookie-cutter letters to help consumers remove all negative items from their credit reports. The exploit is called credit sweeping and until now, its been fairly manual.

A company called Dispute Panda is taking a different approach and leveraging AI to “attack the bureaus” by using flawless handwritten and customized dispute letters that are more successful.

The scary thing about PandaDispute is how efficient and turnkey they make the credit sweep process for consumers using a “triple attack” strategy which involves repeating the dispute over and over again until the tradelines are removed.

Watch how to send an attack here.👇

Two Escaped From Fraud Call Center, Now Dozens Are Freed

Two Malaysian women made a daring escape from a slave compound in Lima, Peru, and alerted police to their captors.

They told police they were lured via social networks with promises of work in casinos in Peru. At first, they were taken to Amsterdam in the Netherlands and then to Peru.

Once there, members of a Taiwanese crime group known as Red Dragon took away their passports and cut them off from communication with relatives

Police raided the scam compounded, arrested their captors and freed 43 trafficked victims, and will be sending them back to Malaysia.

Phantom Hacker Scam Is Exploding. What Is It Exactly?

The FBI is raising the alert on a new scam “Phantom Hackers”. The scam is just a fusion of two scams - Tech Support and Imposter Scams - rolled into one.

Like Pig Butchering, it is multilayered and successful because of the complex setup.

It involves 3 steps;

1. Victim gets a pop-up and contacts a scam center.

2. Scammer fools victim that computer has been hacked

3. Victim is contacted by “Fraud Department” and gets scammed

According to the FBI, tech support scams are soaring with over half a billion in losses to elderly people this year alone.

Click on This Link Or Image Below To See A Sad Case

Buy A Burger and Bailout an Inmate Too

Police charged 10 people in connection to a scheme where multiple Hardee’s employees allegedly used stolen money from customers to bail out inmates.

According to jail staff, they noticed last month that suspiciously large amounts of funds were being placed into the accounts of inmates at the LaPorte County The same inmates were reportedly bonding out of the jail almost immediately and leaving with the remaining balance on a jail-issued debit card.

Officials say the Hardee’s employees involved in the scheme were taking pictures of customers’ debit and credit cards that paid in the drive-thru and were fraudulently using those cards to place money into inmate’s accounts with low bails set.

Your Face Could Help You Safely Checkout Your Shopping Cart

Amex says that it is testing fingerprint and facial recognition with a fraction of its U.S. consumer cardholders before rolling it out across all their customers next year.

When Amex’s U.S. cardholders shopping online use a device that supports fingerprint and facial recognition, customers will be prompted to enable biometric identification.

This Isn’t A Ponzi Scheme. Michael Lewis Is SBF’s Biggest Fan 🥳

I’ve always loved all Michael Lewis’s books - The Big Short, The Blind Side, Liars Poker. Incredible reads all around.

But his latest book called Going Infinite exposes the fact that he got totally scammed by the disheveled cargo-shorts wearing SBF.

He claims if there had not been a run on FTX, the company would still be running perfectly today.

Podcast - A Journey Into Fraud Prevention With Ivan Prokofev

I had the privilege of joining Ivan Prokofev, Payment Fraud Lead at Bumble, on his new Podcast A Journey Into Fraud Prevention, where I discussed how much fraud has changed since 1990 when I got my start.

Ivan told me he wasn’t even born when I started my career. Lol. I am old! 👴

Have a listen to the podcast and please subscribe to it to catch all of his episodes!

Thank you for catching up on my weekly newsletter.

We know this week is particularly brutal for so many of our fraud fighting friends and colleagues from Israel. Actimize, Riskified, Forter, BioCatch, Identiq, Aut10tix, and countless others, all impacted by the senseless tragedy.

Sending you all strength, love and support through this tragic and difficult time. 🇮🇱

FrankonFraud