July 03, 2025
Too Smart to Scam? Think Again, as AI Fraud Is Outsmarting Us All
AI scams are rising fast, and consumers are falling for them more than ever. According to Sift’s new report, 27% of people targeted by GenAI-generated scams have been successfully duped, representing a 62% increase from 2024. Yet during the same period, consumer concern about AI fraud has dropped from 79% to 61%. This 18-point fall in fear is fuelling what Sift calls a “confidence paradox”: as AI scams get smarter, people are letting their guard down.
Scam sophistication is outpacing consumer defences. Seven in ten consumers (70%) say scams are now harder to spot than they were just a year ago. But paradoxically, fewer people are worried about being tricked. It’s a troubling combination: AI tools are making fraud more convincing, but users are growing more comfortable and complacent.
“AI-generated scams and deepfakes are proliferating with speed and concerning sophistication, leaving even the most informed consumers at risk,” said Kevin Lee, SVP of Customer Experience, Trust & Safety at Sift. “Businesses must fight fire with fire—using AI to secure identity trust at every customer touchpoint, which ultimately creates better consumer experiences, mitigates fraud, and fosters profitable growth.”
Digital Natives Are Prime Targets
The report uncovers an unexpected twist in generational behaviour. Gen Z and Millennials—often seen as the most tech-savvy—are also the most overconfident. 52% of Gen Z and 44% of Millennials believe they can easily detect AI scams. But reality tells a different story: 30% of Gen Z and 23% of Millennials have fallen for GenAI-driven fraud.
In contrast, Gen X (30%) and Baby Boomers (13%) express far less confidence in their scam-spotting abilities. That humility may be their biggest strength. Their caution pays off: just 19% of Gen X and 12% of Boomers report being successfully scammed.
Employees Are Sharing Sensitive Data with AI
Sift’s report highlights an alarming behaviour trend that threatens not only consumers but their employers too. Despite heightened privacy awareness, 31% of consumers admit to entering personal or sensitive information into GenAI tools. This includes:
- Email addresses (55%)
- Phone numbers (49%)
- Home addresses (44%)
- Financial details (33%)
- Even company trade secrets (14%)
This behaviour creates a double exposure risk, endangering both the user and their organisation. If cybercriminals harvest this data, they gain powerful tools for targeted phishing and corporate espionage.
What Cybercriminal Behaviour Reveals
Drawing from its global network that processes over 1 trillion events annually, Sift has revealed that fraudsters use 36% more payment methods, which is likely to increase success rates and mask identities. In addition, they operate with 20% fewer IP addresses, indicating tight, coordinated operations.
Fraud also peaks between 10 p.m. and 5 a.m., when most security teams are offline. These patterns highlight the need for around-the-clock monitoring and AI-driven defence strategies to keep pace with evolving attack methods.
