Canadian shoppers are facing a sophisticated new wave of holiday scams powered by artificial intelligence, making fraudulent schemes more convincing and difficult to detect than ever before.
AI Fuels Dramatic Increase in Fraudulent Activity
According to Larry Zelvin, head of Bank of Montreal's financial crimes unit, fraudulent activity typically jumps by an average of 300 per cent during Black Friday week in Canada. This year, artificial intelligence is expected to make the situation significantly worse.
"What's about to hit us in the next few weeks, I think these numbers will go up quite a bit, because AI is a game changer in that it lowers the bar for anyone who wants to commit these frauds," Zelvin said in an interview.
BMO reports that more than two million Canadians have fallen victim to scams during previous Black Friday and Cyber Monday shopping events. The problem has been growing steadily, with nearly three per cent of online shopping transactions in Canada during last year's Thanksgiving-Cyber Monday period flagged as fraudulent - representing a 51 per cent increase from the previous year.
Sophisticated New Scam Techniques
AI technology has enabled fraudsters to create remarkably convincing scams that mimic trusted brands and voices with alarming accuracy. Zelvin noted that consumers are now having a much tougher time distinguishing legitimate websites from fraudulent ones.
"I've been doing this for well over a decade, and the number of fraud victims I am talking to now is far greater than any other time in my career," Zelvin revealed. "Again, it's because of AI, and people, unfortunately, are falling for things that they may not have fallen for a year or two ago."
Current AI-powered scams include perfectly crafted impersonations of executives, false investment opportunities, and sophisticated cryptocurrency schemes. Several emerging trends are particularly concerning for holiday shoppers:
Scammers are using AI to create fake retailer websites, phishing emails, and deepfake videos that impersonate trusted brands or social media influencers.
Fraudsters are embedding malicious links in QR codes found in advertisements, emails, or product packaging.
Fake influencer accounts and counterfeit products on platforms like TikTok Shop are increasingly used to lure shoppers into phishing traps.
Criminals are using contactless payment devices to skim data from phones or wallets without physical contact.
Protective Measures for Holiday Shoppers
BMO recommends several crucial steps consumers can take to protect themselves from fraud during the busy holiday shopping season:
Always verify URLs and look for HTTPS security indicators before entering any personal or payment information.
Navigate directly to retailer websites rather than clicking on links provided in emails or text messages.
Use credit cards for online purchases, as they typically offer stronger fraud protection compared to debit cards or payment apps.
Be particularly skeptical of urgency tactics, as "limited time offers" remain a common scam strategy.
Thoroughly research unfamiliar sellers before making purchases, especially when shopping through social media platforms.
Zelvin emphasizes the importance of maintaining caution despite the excitement of holiday deals. "If a deal looks too good to be true, it probably is. Slow down, verify the source, and don't let urgency override caution."
As artificial intelligence continues to evolve, both financial institutions and consumers must remain vigilant against increasingly sophisticated fraudulent schemes targeting holiday shoppers.
