California Community Colleges Scammed Out of $10 Million by AI Bots
As artificial intelligence bots become more ubiquitous and sophisticated, scammers are increasingly using them in novel ways. Such is the case in California, where scammers are using AI bots to take advantage of California regulations by using AI generated student profiles to try and enroll in community colleges across the state in order to receive Pell grants intended for low income students, with as much as 34% of all college applicants being reported as fake. Posing as homeless, undocumented, or former foster care students who have less stringent identification verification requirements, the bots that successfully enroll then only “attend” classes virtually and submit AI generated homework and answers long enough to receive the $7,400 federal grant and then disappear. The problem is not only confined to California, which estimates these bots have swindled more than $10 million in federal financial aid and an additional $3 million in state aid between March 2023 and March 2024, with similar scams nationwide believes to have cost higher education institutions over $100 million in 2023 alone. What repercussions or investigations are currently underway into these novel scams are unclear at this time, with Chris Ferguson, a representative of the California Chancellor’s Office, saying in a statement that his office so far had, “not been contacted by the U.S. Department of Education or the U.S. Attorney General about an investigation.” However, as the amounts of losses grow, it is sure to elicit scrutiny from law enforcement and the public at large.
AI-Powered Scam Leads to Arrests of Six Individuals in Spain
Last month, Spanish authorities announced the arrest of six individuals with ties to an AI-powered scam that bilked over 280 victims worldwide out of almost $21 million using a “romance baiting” scheme in which nefarious actors pose as “financial advisers” to scam individuals out of their money. What makes this scheme somewhat unique was its overreliance on a plethora of AI tools to pull over virtually every step of the fraud. Using algorithms with inputs fashioned by the perpetrators to target certain would-be victims, they then used AI-generated deepfake ads that specifically targeted the victims, “featuring well-known national figures apparently recommending investing,” in certain products, explained the Policia National in their announcement highlighting the groups methods, with some instances where they used deepfakes to lead the victim into believing they were in a romantic relationship with the scammer. Deepfakes are digitally altered media that impersonates a real person with the intent of tricking the end user into believing it to be authentic, which can now easily be done for a minimal amount of money online through AI tools. Victims were then led to believe they made large returns on said investments through false figures, but then told they needed to pay a large sum to have their assets unfrozen. After that was paid, the victims were then contacted by the scammers portraying themselves as Europol agents or lawyers from the UK who had recovered the stolen “assets” and told victims they could release the recovered amounts after they paid a nominal local tax. The case highlights the level of intricacy involved in online scams given the proliferation of AI tools that are increasingly becoming cheaper and more sophisticated. It will be interesting to see how law enforcement and legislators respond to the increasing threat in the coming years to combat these schemes.
