The Anatomy of a GenAI-Powered Fraud Ring Attack

If they weren’t deploying it as a weapon, fraudsters’ ingenious use of generative AI (genAI) would be impressive. In seemingly no time at all, they’ve made what were previously considered cutting-edge fraud stacks nearly obsolete.?

Network layer DDOS protection tools? No match for genAI-enhanced bots that can mimic human behavior. ID verification systems? Can’t keep up with deepfake face swaps, a fraud attack style that surged 704% in 2023 (1). And Synthetic Identity Fraud (SIF) was already the fastest-growing type of digital fraud, growing 184% from 2019 to 2023. Now hypercharged by genAI, SIF accounts for 85% of all fraud in the US (2). The future of fraud is here, and although it might sound like Scarlett Johansson, it looks like a whole lot of potential for lost revenue.?

But while the tactics are new, this tug-of-war between fraudster-tech and fraud-fighter-tech is not. At NeuroID, we’ve tracked fraud tactics from large-scale evolutions to detailed seasonal trends. And while genAI deployed at fraud ring scale is a new threat, does it really hit any differently than previous tactics—and do you really need to change your approach? Let’s break it down.

The Anatomy of an Attack: Target Locked

Fraud rings don’t attack out of nowhere. They are highly strategic in selecting their targets and they time it for maximum impact.

Case in point: every fintech expects fraud. It’s the nature of the business; as success increases, so does the target on the company’s back. But as one client of ours found, fraud rings specifically put fintechs in their sights at times of massive growth.?

This fintech implemented NeuroID right as they received new funding. Fraud rings pay attention to when there’s new cash influx for fintechs, who are most likely to have a low-fraud protection threshold. They know that a fintech in hyper growth stage is likely to have lean controls, preferring to maximize customer onboarding and minimize friction at that pivotal point. For this fintech, the funding announcement attracted an attack so aggressive that it could have fully derailed their growth during a critical national expansion initiative. Here’s what NeuroID dashboards showed:

Luckily, prior to this fraud ring attack attempt, NeuroID had helped the fintech overhaul its fraud approach, decreasing its daily fraud volume by 35% and alleviating pressure on their manual review team. NeuroID was able to trace this attack back to the fintech’s marketing promotion, identifying the exploited gap that was attracting fraud rings, and helping to prevent similar attacks in the future, whether from genAI or traditional strategies. No matter what fraud ring methodology was used, the best practices defense would be the same: Real-time visibility that can provide specific vector analysis and insights into proactive next steps.?

The Anatomy of an Attack: Exploitation and Extraction

Once they’re in, fraud rings move swiftly to extract value. This can involve transferring funds, making fraudulent purchases, stealing sensitive information for future use, or more targeted strategies. The extraction phase is rapid, often occurring within hours of the initial breach to minimize the risk of detection and response. NeuroID data shows that 74% of fraud attacks last less than 33 hours. Of course, not all of these attack attempts were fraud rings. Different short spikes of attack activity are typical of different fraud strategies: they could be instances of ambient fraud, small-scale activity from novices and first-person fraudsters, or (in the worst case) more focused fraud ring attacks testing controls before a full-on blitz. Whatever the cause, these patterns are clear indicators of either an ongoing or future attack—one that only NeuroID’s next-gen behavioral analytics can detect, even when implemented by genAI-supported tactics.

Defensive Strategies Against GenAI Fraud Rings

Traditional fraud detection methods often rely on static data points, such as PII, which can be easily compromised (even before we had genAI in the mix). Instead, behavioral analytics provides a real-time approach, analyzing user interactions as they happen to detect anomalies that indicate risky, possibly fraudulent behavior. By understanding how users interact with forms, you can distinguish between trustworthy users and fraudsters—even if those fraudsters possess perfect PII or incorporate genAI bot methodology. As Kaylee Sandberg, a Fraud Manager at Grasshopper Bank, recently told us: “Fraudsters today almost have cleaner identities than normal people. Traditional resources don’t go as far as they used to. NeuroID lets us dig deeper where we couldn’t see before to find what’s really going on.”

Strategy 1: Proactive Monitoring and Alerts

Implementing proactive monitoring tools that analyze crowd-level behavior will help detect fraud rings’ testing activities and similar risky indicators before a full-scale attack occurs. These tools provide real-time alerts when suspicious activity patterns emerge, enabling you to respond swiftly and mitigate potential breaches before they escalate to full-blown attacks.?

Strategy 2: Seasonal, Adaptive Preparedness

Fraud rings often time their attacks to coincide with periods of high money movement online, such as holiday seasons or tax time. Developing seasonal fraud prevention strategies that anticipate these peaks can enhance readiness. For example, adjusting risk thresholds and monitoring for increased probing during high-risk times can help prevent larger attacks.

Strategy 3: Flexible and Adaptive Systems

As fraud tactics evolve, so must your defenses. Incorporating adaptive systems that are future-proofed against new threats is the best way to stay ahead. Fraudsters don’t have compliance reviews for software or approval teams who sign off before they try a new, nefarious technology. FraudGPT is a real tool—and only costs $1700/year (3). Fraud rings can weaponize technology faster than you can. So to stay ahead means staying flexible: not only updating software and protocols against new threats but also continuously ensuring your teams have strong vendor partners who can help them recognize and respond to emerging patterns. With genAI at the forefront, behavior is one of the best answers to flexibility, especially for top-of-funnel fraud.?

Dissect to Detect: Get the Full Report on Fraud Rings

Want to get a deeper understanding of how these fraud rings work? Download our Anatomy of a Fraud Ring report, which includes an analysis of 5 fraud ring attacks across 5 different digital industries, including a breakdown of who was targeted and why, background information and future predictions on evolving fraud ring styles and strategies, and investigations into how fraud rings choose their victims.

Sources:

1. iProov Threat Intelligence Report 2024
2. McKinsey & Co. Fighting Back Against Synthetic Identity Fraud
3. WormGPT and FraudGPT - The Rise Malicious LLMs