Senators Call for New Rules to Combat AI-Powered Scams

Senators have called on regulators to protect consumers from artificial intelligence (AI)-powered scams.

In a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, United States Senators Sherrod Brown, Bob Menendez, Jack Reed and Tina Smith raised concerns over AI voice cloning and other AI and machine learning (ML) technologies that can be used to commit financial fraud, according to a Thursday (July 6) press release issued by the Senate Committee on Banking, Housing and Urban Affairs.

“Voice cloning adds a new, threatening dimension to these scams, allowing fraudsters to generate voice clips to convincingly impersonate friends, family or potentially even financial advisors and bank employees,” the lawmakers said in the letter. “Hearing trusted voices amplifies the risks of consumers falling victims to scams.”

The Senators urged the CFPB to review the risks posed by AI and ML and take action regarding the governance of this new technology as it may affect consumer financial products.

They added that they have learned in communications with major financial institutions that those organizations “do not have a uniform and robust approach to detecting and preventing AI-driven threats.”

“The risks posed by voice cloning in the realm of financial scams demand immediate attention and action,” the lawmakers said in the letter. “To effectively address this emerging threat, we respectfully request that the CFPB review the risks posed by this new technology as soon as practicable and take action under CFPB’s existing authorities to protect consumers.”

PYMNTS research has found that cybercriminals use a variety of sophisticated tactics to compromise security measures and commit B2B payments fraud.

Fraud-related costs now amount to 2% to 5% of organizations’ annual revenues, as reported in the “FinTech Risk Management Playbook: Combating B2B Payments Fraud,” a PYMNTS and nsKnox collaboration.

Fraudsters continued adoption of new technologies like phone spoofing and voice cloning applications have caused additional challenges for those working to prevent scams, nsKnox Chief Technology Officer Allen Shiber told PYMNTS in an interview posted in January 2022.

For businesses, preventing payments fraud in this environment requires a multilayered approach that includes sound technical infrastructure, strong processes carried out by well-trained employees, and an automated, end-to-end antifraud solution, Shiber said at the time.

“This is the reason that companies like nsKnox that provide a third layer of automation and fraud prevention technology are probably going to be very busy — because we have a lot of new challenges,” Shiber said.

The post Senators Call for New Rules to Combat AI-Powered Scams first appeared on PYMNTS.com.