The unholy trinity powering the scam economy

Cybercrime, fraud and scams, for far too long, have been treated as three distinct challenges with their own set of separate solutions. The reality is that they form an unholy trinity powering today’s scam economy.  

This fact of digital life was identified last month in the President Trump’s executive order on “Combating Cybercrime, Fraud, and Predatory Schemes Against American Citizens,” which included a subtle but critical point that has so far gone unnoticed. The presidential directive explicitly connects these pillars for the first time — a long-overdue step recognizing that we have entered a new era of industrialized fraud that threatens institutions and individuals alike.  

This latest action is a step in the right direction, yet it still fails to address the underlying problem: the exploitation of identity, turbocharged by AI and deployed at scale.  

Today’s fraudsters, cyber criminals and scam artists are stealing real identities and creating synthetic identities to gain illicit access to institutions, siphon billions in taxpayer funds, and steal from vulnerable Americans, including the elderly and military members and their families.  

More often than not, these are organized networks of sophisticated fraudsters moving at unprecedented speed and scale to undermine our institutions and profit from the scam economy. They profit off ghost students, ghost renters, ghost patients and more. They weaponize AI to generate convincing identities, automate social engineering, create synthetic documents, and scale scam campaigns across borders.  

To put a stop to this, policymakers, industry leaders and law enforcement must build a coordinated response that matches the sophistication of the adversaries we face.  

At my company, we analyze billions of identity and transaction signals across industries. The data reveal that fraud today is not random. It operates through identifiable behavior patterns, networks and infrastructure. Consequently, digital identity cannot be an afterthought. It must be treated as the critical infrastructure it is while embracing four key ideas to detect, disrupt and, ultimately, dismantle these criminal networks.  

First, we must target the entire fraud ecosystem. A growing number of platforms and services are unintentionally enabling the industrialization of fraud. These include tools that allow bad actors to stand up fake businesses, domains and payment endpoints that appear legitimate. Whether they recognize it or not, these platforms and services have become part of the fraud supply chain. Addressing cyber-enabled fraud requires understanding and disrupting the infrastructure that allows scams to scale in the first place. If we continue treating fraud as a series of isolated incidents, we will remain one step behind adversaries. 

Second, we need more information sharing and a coordinated response across industries. Our research demonstrates the existence of fraud behavior clusters, or groups of interconnected identities, devices and transactions moving together. These clusters create a limited window of opportunity for detection. If organizations and governments act quickly, they can identify and shut down fraud campaigns before criminals shift tactics and disperse. 

Third, identity intelligence can help disrupt money mule account networks. Money mules either wittingly or unwittingly help fraudsters move and obscure illicit funds. Instead of addressing mule accounts one by one, organizations now have the ability to identify and dismantle entire networks at scale.

Finally, financial systems historically focus scrutiny on the sender of funds, monitoring suspicious payments or potential account takeovers. But every transaction has two identities: the sender and the receiver. Increasingly, fraud resides on the receiving side, where mule accounts, fake businesses and fraudulent merchants are used to collect and move illicit funds, particularly across borders. To truly stop fraud, both sides of the transaction must be verified. 

Cyber-enabled fraud has now been identified as a national security challenge and a public safety crisis. According to the Federal Trade Commission, U.S. consumers are losing billions of dollars each year — $12.5 billion to fraud in scams in 2024 — to sophisticated scam operations run by organized criminal networks. 

If we are serious about stopping wave after wave of cyber-enabled scams and fraud, we must wake up to the challenge and give digital identity the attention it deserves.  

Rivka Little has more than a decade of experience working in fraud prevention and payments. She currently serves as chief growth officer for Socure. 

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