AI scams are rising: How you can spot a fraudster and stay safe

Gone are the days when fraudsters relied on poorly written emails full of spelling mistakes and unbelievable promises. Today, criminals are using artificial intelligence (AI) to create highly sophisticated scams that trick people out of thousands of pounds.

Many people believe they would never fall victim to fraud. However, the latest figures from banking trade body UK Finance show authorised fraud – where victims willingly transfer money – increased by nearly 20% in 2025, reaching a staggering £576 million.

There were 248,070 cases, up 7% year-on-year, highlighting how scammers are becoming more convincing and harder to detect.

Why AI is making scams more dangerous

AI is allowing criminals to create more realistic messages, as well as fake websites. The technology also allows for personalised attacks using publicly available information.

This all makes it far easier for fraudsters to manipulate victims into paying for goods, services or investments that do not exist.

Pretty scary, right?

The most common scams

1. Purchase Scams

Purchase scams are the most common type of fraud, accounting for more than 70% of cases and £118 million in losses.

Typical examples includes fake listings for cars, phones or laptops, as well as bogus holiday rentals or concert tickets.

Often deals are advertised at prices that seem too good to be true.

Criminals tend to pressure victims to pay via bank transfer instead of secure payment platforms. Once the money is sent, the seller disappears.

2. Investment Scams

There are fewer cases but investment scams cause the biggest financial losses, totalling £221 million in 2025, according to UK Finance.

Fraudsters promise top returns and persuade victims to invest in the likes of cryptocurrencies, property or land schemes, as well as gold, wine or carbon credits

They usually promise high or guaranteed returns to build trust and urgency..

3. Romance Scams

Romance fraud is growing quickly, with cases rising 22% and losses reaching £39.2 million.

In these situations fraudsters create fake profiles on dating apps or social media and go on to build relationships over time to gain trust. Eventually the scammer requests money for emergencies, such as medical bills or travel issues.

Where Do Most Scams Start?

The majority of scams now originate online, including social media platforms, online marketplaces, as well as email and messaging apps.

A significant number also begin with phone calls, where scammers impersonate banks, delivery firms or government agencies.

Can You Get Your Money Back After Fraud?

If money is stolen without your authorisation (for example, through identity theft), banks will usually refund you.

However, it’s more complicated with authorised fraud, where you made the payment yourself. In 2025, banks reimbursed just 61% of these losses, leaving many victims out of pocket.

This makes prevention more important than ever.

How to Protect Yourself From Scams

Follow these key tips to avoid becoming a victim:

• Think before you pay: Always double-check who you are sending money to

• Avoid bank transfers: Especially when buying from unknown sellers

• Use trusted platforms: Stick to reputable websites and payment methods

• Check reviews: Look up companies on sites like Trustpilot

• Be sceptical: If something feels off, it probably is

• Ignore pressure tactics: Scammers often push for urgent payments

• Watch for “too good to be true” offers: Especially with investments

Legitimate companies will never contact you out of the blue with guaranteed investment opportunities.

What to do if you’ve been scammed

If you think you’ve been a victim of fraud contact your bank immediately, and report the incident to Action Fraud.

Stop all further payments to the suspected scammer.