Fraudify Wrapped 2024: The Year in Fraud Trends

Welcome to Fraudify Wrapped 2024! This year, fraud examiners tracked the top scams reshaping industries, the most impacted sectors and the tools fraudsters wielded with alarming innovation. Drawing from industry trends, news stories and expert insights, we have compiled a recap of the biggest fraud developments of the year.

The Top Frauds of 2024

These schemes dominated the fraud landscape, posing challenges for individuals and organizations alike:

1. Pig Butchering

Fraudsters lured victims into fake investment schemes by posing as romantic interests or long-lost friends. Once trust was established, they manipulated victims into transferring large sums to fraudulent cryptocurrency and digital asset investment platforms. The twist? Many scammers used artificial intelligence (AI) to maintain convincing interactions. Pig butchering scams reached a new level of sophistication, with fraudsters deploying professional-looking websites, social media profiles and even customer service representatives to make their operations appear legitimate. Meta released a statement on going after criminal organizations behind pig butchering schemes, stating, “This year alone, we’ve taken down over two million accounts linked to scam centers in Myanmar, Laos, Cambodia, the United Arab Emirates and the Philippines.” These scams were not only devastating financially but emotionally, as victims invested their savings and time into building relationships with scammers who had no intention of ever returning their funds. Global losses from these schemes skyrocketed, with a surge in targeted regions such as Southeast Asia and North America.

2. Account Takeovers and New Account Fraud

This trend saw cybercriminals exploiting stolen credentials to hijack accounts or create fraudulent ones. Account takeovers have reached alarming rates over the past few years, with a notable uptick in attacks on online banking platforms and e-commerce websites. Fraudsters often used information obtained from data breaches or social engineering tactics to gain access to financial accounts and make unauthorized withdrawals. On the other hand, new account fraud flourished, as criminals used synthetic identities to open new accounts and secure loans, often escaping detection due to advancements in AI technology. These schemes were most prevalent in the financial services industry, where fraudsters circumvented financial institutions' automated fraud detection systems to carry out large-scale money laundering operations.

3. Synthetic Identity Fraud

By merging real and fabricated data, criminals created synthetic identities that slipped through detection systems. This type of fraud has become even more sophisticated, with fraudsters combining legitimate personal information with fabricated elements to create entirely new identities. These synthetic identities were then used to secure credit lines, loans and even government benefits. Financial institutions and other service providers found it increasingly difficult to spot these fraudsters, as the synthetic profiles often appeared to have established histories, complete with credit reports and verifiable employment records. Synthetic identity fraud continued to plague the financial services and retail sectors, with fraudsters leveraging these fake identities for criminal activities such as money laundering, credit card fraud and loan defaults.

4. Deepfake Business Email Compromise (BEC)

BEC scams continued evolving in sophistication through the increased incorporation of deepfake technology. Fraudsters created hyper-realistic AI-generated video and audio to impersonate executives, convincing employees to authorize large payments. Deepfake BEC became one of the most sophisticated scams, with cybercriminals using AI to simulate the voices and faces of company CEOs, CFOs and even government officials. These deepfakes were used to deceive employees into transferring funds, altering contracts or divulging sensitive information. In some cases, the fraudsters even used deepfake technology to impersonate high-level employees in virtual meetings. The success of these scams relied on how convincing the deepfakes were and the industry saw a rise in software developed specifically to detect these fraudulent media manipulations.

5. Government Impersonation

Scammers posed as government officials, targeting individuals and businesses with fake IRS calls, counterfeit permits and fraudulent grant offers. The frequency of these scams is increasing, with fraudsters impersonating government agencies to defraud citizens out of tax payments, welfare checks or social security benefits. Some scammers even went so far as to create fake websites that mirrored official government portals, convincing victims to input personal information or make payments to fake accounts. Government impersonation also affected businesses, with fraudsters submitting fraudulent applications for government contracts and grants. These schemes disrupted operations, drained financial resources and damaged reputations.

Top Industries Affected by Fraud

Fraud spared no sector, but these industries faced the brunt of attacks:

1. Healthcare

Fraudulent claims, fake suppliers and billing scams surged, exploiting weaknesses in a stressed sector. Healthcare institutions, particularly hospitals, have been hit hard with fraudulent billing schemes. Fraudsters submitted fake invoices or overstated charges for medical procedures and equipment. In some cases, they even posed as medical suppliers to sell counterfeit or substandard medications. This type of fraud not only resulted in financial losses but also put patients' health and safety at risk. Additionally, healthcare providers continued to be prime targets for cybercriminals, who used stolen personal health information to launch identity theft and insurance fraud schemes.

2. Government

Impersonation scams and fraudulent applications for grants and benefits highlighted vulnerabilities in public systems. The government sector saw a significant rise in fraud schemes in recent years, particularly targeting COVID-19 relief funds, unemployment benefits and other social services. Scammers exploited government programs designed to provide financial relief during the pandemic by submitting false claims and using stolen identities. These scams not only hurt the financial integrity of governments but also eroded public trust in their ability to protect citizens. Additionally, since governments have an enormous amount of obligations for which they depend on private sector companies, contract and procurement fraud continues to be a major concern for government agencies.

3. Financial Services 

Account takeovers and synthetic identity fraud led to significant monetary losses and damaged trust. The financial services sector has remained a top target for fraudsters, with account takeovers affecting banks, investment firms and e-commerce platforms. Fraudsters also used synthetic identities to gain access to loans, credit lines and even open new accounts, leaving financial institutions with massive losses. Financial services companies struggled to keep up with the sophisticated tactics used by criminals, who often leveraged stolen data from previous breaches or used AI tools to manipulate fraud detection systems. The rising cost of fraud in the financial sector has led many institutions to invest heavily in new technologies, such as AI-powered fraud prevention systems, to detect and mitigate these risks.

4. Manufacturing

Supply chain scams, including fake vendor schemes, created logistical nightmares. The manufacturing industry found itself increasingly targeted by fraudsters who posed as suppliers or vendors to intercept payments or deliver counterfeit goods. Scammers often exploited the industry's reliance on complex supply chains and global networks, tricking companies into paying for goods that were never delivered or for substandard materials. As manufacturers grappled with disrupted supply chains, the financial impact of these frauds grew, with some companies losing millions of dollars in fake orders and payments.

5. Construction 

Fraudsters exploited payment systems and posed as contractors to swindle businesses. The construction industry has faced a surge in fraud schemes, with criminals posing as contractors, subcontractors or suppliers to receive payments for non-existent work or materials. These scams were often facilitated by forged documents and fake invoices that appeared legitimate at first glance. The construction industry’s vulnerability to fraud grew as digital payment systems became more prevalent, making it easier for fraudsters to manipulate payment approvals or alter financial records. Additionally, the high costs associated with many construction projects tend to lead to large losses when fraud does occur. 

Fraud Genre of the Year: AI-Powered Fraud

Artificial intelligence was the headline act in 2024’s fraud trends, as evident throughout this blog. Fraudsters deployed AI to craft realistic phishing emails, automate social engineering and create networks of fake identities. Deepfakes, synthetic data and automated scam operations blurred the line between human and machine-led fraud. AI-powered fraud tools grew exponentially this year, making it harder for traditional fraud detection methods to keep pace. 

In a recent Public Service Announcement (PSA) released by the Federal Bureau of Investigation (FBI), the FBI warned the public that “criminals exploit generative artificial intelligence (AI) to commit fraud on a larger scale which increases the believability of their schemes.” Additionally, they pointed out that “Generative AI reduces the time and effort criminals must expend to deceive their targets,” making it easier and faster for criminals to generate convincing fake identities or manipulate large datasets in a fraction of the time it took human fraudsters.

"Fraudify" Highlights

Here are fraud highlights that stood out to us throughout 2024:

Tactic of the Year: 

Social engineering continued to dominate, with fraudsters leveraging human trust to power most schemes.

Comeback Scheme: 

Phishing emails made a strong return, enhanced by generative AI to target victims at scale.

Looking Ahead to 2025

The battle against fraud is far from over. As scams grow more sophisticated, collaboration, innovation and proactive measures will be essential to mitigating risks. Let Fraudify Wrapped serve as a reminder: understanding the trends is the first step to combating them.

What fraud trends will shape the year ahead? Stay tuned for our Fraud Trends of 2025 blog coming this January, where we’ll explore the emerging threats and opportunities to stay one step ahead.