Published:
Dec 22, 2024
Author:
Sarah Parsons Wolter
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As financial systems become faster and more connected, they also become more vulnerable. The rise of real-time payments and advancements in AI has made moving money seamless for consumers — and alarmingly easy for fraudsters. In 2023, scammers in the US stole an estimated $158b, with $12b linked to AI-driven schemes such as deepfakes and social engineering. This alarming trend is set to skyrocket, with AI fraud alone projected to cost $40b annually by 2027.
The case of Christopher Pitet, a seasoned California lawyer, highlights the growing sophistication of fraud. After receiving a seemingly legitimate email with payment instructions tied to a client’s legal settlement, he wired $59k directly to a hacker's account. The criminal had infiltrated his firm’s server, monitoring conversations to strike at the perfect moment. When Pitet sought Citibank’s help to recover the funds, the bank denied responsibility, citing multiple similar cases where victims had unsuccessfully sued for restitution.
As scams become more industrialized, the question of accountability looms large. Should banks be liable for safeguarding customers, or do tech companies that host fraudulent schemes share the blame? In the UK, banks are required to reimburse victims up to £85k per case. The US, however, has yet to enforce similar protections, leaving consumers to bear the burden while financial institutions and tech giants deflect responsibility.
As cyber scams evolve into a high-stakes game of deception, accountability becomes the ultimate mystery. Will global systems unmask the culprit — or will this play out like a real-life game of Clue with everyone pointing fingers while the victims of cyber scams are left holding the bill?
Portfolio News
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Pointing Fingers
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Industry News
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Select Financings
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Funding Societies - Singapore based SME lending platform raised $25m in Series E funding led by Cool Japan Fund. Read more
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