For the last few years I have told you about numerous instances where artificial intelligence (AI) has been used by scammers to make their scams more believeable. Romance scams, celebrity imposter scams, phishing email scams, business email compromise scams and counterfeit websites are just a few of the scams that have been made far worse through scammers use of AI technology including voice cloning and deepfakes. Fortunately, however, AI is a double edged sword and more and more it is being used by legitimate companies to recognize and even predict scam trends to help avoid being scammed.
Recently, Paypal has introduced new AI powered scam alerts for its Payal and Venmo Friends and Family Payments. The peer to peer payment system Venmo is owned by PayPal. Its Friends and Family payment option is intended to be used only to send money to friends and family and not for commercial purposes, however this has not stopped scammers from tricking people into using PayPal and Venmo to unwittingly pay scammers.
The new dynamic scam detection system monitors payments and will issue an alert when it detects a potential scam. The alerts reflect the risk level of the payment and become stronger when the risk is determined to be greater. It will even automatically block payments in very high risk situations. The AI system used by PayPal utilizes machine learning to adapt to newer scams that haven’t even been previously identified.
Visa and Mastercard are also increasingly using AI to detect scams by monitoring transactions and recognizing potential scams as well as constantly learning about and even predicting new scams.
TIPS
While PayPal offers significant protection from fraudulent transactions, Venmo does not offer such protection, which is why it should never be used for commercial transactions, but only to transfer small amounts of money to people you know. It is important to remember that the new AI powered scam alerts for Venmo only apply to its Friends and Family Payments.
As for your credit card, the major credit card companies do a good job at protecting you from scams. In addition, under federal law your liability for unauthorized use of a credit card is limited to no more than $50 and most credit card companies will not even hold you responsible for even that amount However, your liability for unauthorized use of your debit card can potentially be unlimited if you do not promptly notice and report the fraudulent use of your card thereby putting your entire bank account tied to your debit card in jeopardy so when choosing whether to use your credit card or debit card for retail transactions, you should always pick your credit card In addition, even if you notice and report the unauthorized use of your debit card immediately, your bank account is frozen while the bank investigates the matter thereby temporarily taking away your own access to your bank account. Limit your debit card use to ATMs.
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