Canadian Telecom Summit: AI taking phone fraud to new heights

Photo courtesy of IT World Canada

Article courtesy of Ashee Pamma, IT World Canada

TORONTO. – At the 22nd Canadian Telecom Summit, Seattle-based Hiya unpacked the state of phone fraud in Canada, and how the rise of generative AI is exacerbating the issue.

The company’s senior director of business development, Tony Janusky, kicked off the discussion highlighting the 2021 findings from the Canadian Anti Fraud Center, which indicate that voice-related phone scams accounted for 30 per cent of the 106,000 fraud reports received that year. Only 15 per cent stemmed from emails, and another 10 per cent from social media.

And, as a result, scammers are using an arsenal of tools to capitalize on the use of voice calls, which, Janusky said, continue to be the preferred medium of interaction for Canadians.

Related: CRTC holds meeting with five countries to fight scam calls

Jonathan Nelson, director of project management at Hiya, explained that the emergence of cloud computing allows scammers to diversify their infrastructure, making it simpler and cheaper for them to operate. Plus, they are relying heavily on automation to create millions of spam calls.

Generative AI is also abetting scammers in multiple ways, whether it be for speech augmentation (e.g. removing an accent), for generating more sophisticated scripts, or to replace the human entirely and use fully AI-generated audio.

Nelson added, “The major one that’s hitting all the headlines, of course, is voice cloning. So this is not where they’re just trying to create an artificial human, but they’re creating a specific artificial human, that friend or family member, or co-worker, doing full impersonation. And what’s particularly scary about that is it opens the door for tailored attacks.”

With the emergence of these new tools, losses are going up significantly, from C$165 million in 2020 to C$531 million in 2022. In 2023, that figure is expected to tip over C$600 million, Janusky warned.

“It’s not an individual in their basement, one off doing these kinds of scams. These are organizations. It truly is organized crime. They are businesses operating to take money out of honest Canadians’ pockets to run their organizations,” asserted Janusky.

The company laid out the following opportunities to crack down on phone scams, from the originator to the recipient:

Ramp up enforcement, identify, trace back, and shut down the company/person that made the call, even if they spoofed

Telecom providers need to strengthen their Know Your Customer (KYC) policy, making sure they know who they’re letting on their networks in the first place. If they are unable to stop a scam while it’s happening, they need to stop any future calls.

Victims should speak up, send complaints, and alert companies like Hiya so that they can shut down any future calls.

On a more specific level, Hiya uses an analytics system to detect malicious calls as they happen. For instance, the company would focus on the activities of a specific phone number, see if people are hanging up after 5-6 seconds and are reporting the number.

However, using the phone number solely as an indicator for a scam is getting harder, explained Nelson.

“They do not sit there blasting through the same phone number anymore. It’s far too easy to get caught that way.”

However, the history of the phone number (no history is a red flag), which company it originates from, the legitimacy of that company, or the fact that it just came into existence are all good indicators of phone fraud. Industry standards like STIR/SHAKEN that differentiates legitimate calls from malicious calls, though having its own limitations, also come in handy.

Related: SHAKE them and STIR them: how Canada is fighting scam calls

Hiya also has a spam threat scanning system that uses AI to calculate the risk that a call is fraudulent. For instance, it looks at the time the call was made, whether the recipient should be expecting that call, or whether a particular area has been targeted, all of which would contribute to the risk assessment of a call.

These new tools are necessary, especially as the problem of phone frauds continues to grow and get more sophisticated, said Janusky.

“We’re going to see an upturn and a lot of creativity and pretty heinous activity. We’re just going to need more and more protection for our customers.“