Fraud is on the rise. Blame AI

Sophisticated artificial intelligence-driven fraud is increasingly targeting U.S. consumers, who are falling victim to schemes that steal their IDS, credit cards or make fraudulent charges, a new analysis has found.

According to the latest Top Fraud Trends Report by TransUnion, 1 in 6 U.S. consumers said they lost money to digital fraud in the form of email, online, phone call or text messaging scams in the last year. The median reported loss was $2,307.

“Fraud is big. It’s growing, it’s everywhere and it’s not going away,” Clint Lowry, vice president of global fraud solutions at TransUnion, told USA TODAY.

Generative AI has likely accelerated the scale and sophistication of the criminal activity.

AI is a powerful tool that businesses like TransUnion can use to protect consumers, but fraudsters can and are also using it to their advantage, Lowry said.

“With the advent of AI, you get these incredibly professional fraud schemes that can be done very quickly and easily by anyone with very limited resources,” he said.

Digital fraud is on the rise

Americans were disproportionately affected by stolen credit card and fraudulent charge schemes, according to the report. One-third of U.S. consumers who lost money to digital fraud cited such attacks as the cause. It was the highest reported category in the country and significantly higher than the global rate of 19%.

“Criminals are weaponizing both consumer trust and emerging technologies,” Naureen Ali, U.S. head of fraud at TransUnion, said in a press release.

Stolen credit card information via phishing, website skimming and account takeover are the leading methods of U.S. consumer fraud losses. Phishing in the form of fraudulent emails, QR codes meant to steal data or social posts was the most reported scam, with 39% of consumers saying they were targeted.

What industries saw the biggest amounts of fraud?

Sectors that focus on consumer interaction, social connection and entertainment saw the largest number of incidents with fraud in the U.S., the report said. Online dating sites saw a 7% increase while nearly 1 in 10 U.S. transactions on gaming sites were flagged for digital fraud.

There are also generational differences, with Gen Z consumers reporting the highest amount of fraud. In the U.S., 38% reported losses, which was the highest among generations. This may be due to Gen Z’s frequent use of gaming platforms, cryptocurrency exchanges and social apps, which are commonly targeted by fraudsters, TransUnion said.

Fraud: Americans lost a record $15.9 billion to scams in 2025, FTC says

What can consumers do to protect themselves?

Lowry offered a few tips to protect yourself against fraud, including using different strong passwords for accounts, relying on a password manager and using two-factor authentication measures. Checking your credit reports and putting in place credit freezes to protect those reports are also helpful, he said.

Protect your identity and don’t give out too much information online, including oversharing on social media since fraudsters can take that information to hack into your accounts, Lowry said.

Fraudsters “prey on people’s good nature. They prey on people’s charity and in some cases, they prey on fear,” Lowry said.

Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher and @blinfisher.bsky.social on Bluesky. Sign up for our free The Daily Money newsletter, which breaks down complex consumer and financial news. Subscribe here.