Now Trending: What Fraud Tactics Should You Look out for in 2025?
By Loran March, Sr. Fraud Analyst and Sami Davis, Fraud Analyst
January 10, 2025
As technology advances, bad actors are becoming more sophisticated and fraud tactics are rapidly evolving. As we look ahead to 2025, several key trends and developments are anticipated to shape the fraud landscape. Read more for an overview of the fraud trends predicted for the new year and learn how to beat fraudsters at their own game through increased vigilance and innovation.
Increased Use of Artificial Intelligence and Machine Learning
The increased use of Artificial Intelligence (AI) and Machine Learning (ML) is one of the most significant trends predicted for 2025 in both perpetrating and combating fraud. AI and ML algorithms can analyze vast amounts of data at unprecedented speeds, making them powerful tools for detecting fraud patterns and anomalies. However, fraudsters are also leveraging these technologies to create more sophisticated schemes.
AI in Fraud Perpetration
Conversely, fraudsters will use AI to craft and automate more convincing social engineering attacks and synthetic identity theft. Deepfake technology, which uses AI to create realistic audio and video forgeries, is likely to be deployed in social engineering attacks, such as phishing and business email compromises, as well as synthetic identity theft, making it harder for individuals and organizations to distinguish between genuine and fraudulent communications and individuals. These deepfakes can be used to impersonate executives or trusted individuals, convincing employees to transfer funds or reveal confidential information. Synthetic identity theft is the blending of real information (e.g., social security number and name) with fake information (e.g., address), which is harder to detect. Additionally, AI can be used to automate phishing campaigns and use AI-driven chatbots to engage with potential victims, extracting sensitive information through seemingly legitimate conversations.
AI in Fraud Detection
Financial institutions and businesses are expected to invest in AI-driven fraud detection systems. These systems will continuously learn from new data, improving their ability to identify fraudulent activities, enable real-time monitoring of transactions, and reduce the time to detect and respond to fraud. Companies will be able to flag suspicious behavior more efficiently and effectively by having AI analyze transaction patterns, user behaviors and anomalies in real time. Furthermore, AI can help identify previously unknown fraud techniques by recognizing subtle patterns that human analysts might miss. As an example, this year, Mastercard implemented the use of generative AI and doubled the speed at which they detected compromised cards, reduced false positives and became aware of more complex fraud patterns.1
Educating your members on common phishing attack indicators (Avoiding Social Engineering and Phishing Attacks | CISA) and cautioning them to be wary of what information they share online can reduce their chances of becoming a victim. Your credit union will need to monitor for inconsistencies in member information, such as mismatched addresses or unusual account activity, to help identify potential synthetic identities. Collaboration and information sharing among financial institutions can also aid in detecting and preventing synthetic identity fraud.
Expansion of Cyber Fraud
As technology continues to evolve, cyber fraud is expected to grow in complexity and frequency. The increasing reliance on digital platforms for financial transactions, communication and data storage creates new vulnerabilities for cybercriminals to exploit your members.
Ransomware Attacks
Ransomware attacks, where malicious software encrypts a victim's data until a ransom is paid, are predicted to become more prevalent and targeted. These attacks will likely focus on critical infrastructure, healthcare systems and large corporations, where the impact and potential payout are substantial. Attackers are expected to use advanced encryption techniques, making it nearly impossible for victims to recover their data without paying the ransom.2
The continued rise of Ransomware-as-a-Service (RaaS) platforms, where cybercriminals sell or lease ransomware tools to others, will contribute to the increase in ransomware attacks, as this business model lowers the barrier to entry for aspiring cybercriminals. It is important for your credit union to invest in robust cybersecurity measures, including regular data backups, employee training and incident response plans to mitigate the risk and impact of ransomware attacks.3
Credential Stuffing
Credential stuffing, a cyber-attack where stolen usernames and passwords are used to gain unauthorized access to accounts, is expected to rise.4 With the increasing number of data breaches, fraudsters have access to vast repositories of credentials, which they can use to breach accounts across multiple platforms due to the common practice of reusing passwords.
Your credit union will need to implement multi-factor authentication (MFA) and other security measures to protect against credential stuffing attacks. Automated tools that monitor for unusual login attempts and behavior analytics can also help in detecting and preventing these attacks. Educating members about the importance of strong, unique passwords for each account is crucial in reducing the success rate of credential stuffing attacks.
Cryptocurrency and Blockchain Fraud
The rise of cryptocurrencies and blockchain technology presents even more opportunities for fraudsters to prey on your members and creates new challenges for fraud prevention.
Cryptocurrency Scams
VPNRanks expects cryptocurrency scam losses to reach $11.1 billion in 2025.5 Cryptocurrency scams are expected to continue the pivot to more targeted scams such as investment scams (e.g., pig butchering), romance scams and imposter scams. Fraudsters will exploit the lack of public understanding of cryptocurrencies and regulation to perpetrate these scams. Members may be lured into schemes with promises of high returns, only to lose their money when the scam collapses. To protect against cryptocurrency scams, your credit union should encourage members to conduct thorough due diligence on projects and avoid offers that seem too good to be true. Educating the public about the risks and warning signs of cryptocurrency scams can also reduce the number of victims.
Check Fraud
Despite the increasing shift towards digital transactions, check fraud persists as a significant challenge and is set to evolve alongside technological advancements. In 2025, fraudsters will likely exploit sophisticated printing technologies and AI to produce counterfeit checks that are nearly indistinguishable from genuine ones. These counterfeit checks may replicate the design and security features of legitimate checks, making them more deceptive to both recipients and financial institutions.
To counteract check fraud, your credit union should adopt more advanced verification processes. This includes deploying AI-powered tools to evaluate the authenticity of checks, uncover inconsistencies and identify potential fraud before processing occurs. Machine learning algorithms can be instrumental in detecting patterns indicative of check fraud, such as irregular deposit frequencies or discrepancies in check details.
Moreover, it will be crucial to enhance the education of consumers and businesses about the dangers of check fraud and the importance of protecting checkbooks and personal information. Promoting the use of electronic payments and providing guidelines on recognizing and reporting suspicious checks will play a key role in diminishing the incidence of check fraud.
Conclusion
Alloya understands that the rapid advancement of technology and evolving regulatory environments will significantly influence the fraud landscape in 2025. We know that fraud is a significant challenge for our member credit unions and that it is crucial to stay informed about fraud trends and effective protective measures. Alloya is actively reviewing solutions such as leveraging AI and machine learning and enhancing cybersecurity practices to effectively navigate the complex fraud landscape of the future. We are committed to staying one step ahead of fraudsters and doing everything in our power to keep our members safe.
1 Mastercard Accelerates Card Fraud Detection with Generative-AI Technology | Mastercard Newsroom
2 Homeland Threat Assessment 2025
3 Global firms targeted by ransomware 2023 | Statista
4 Caution! Credential Stuffing on the Rise | Mitratech
5 Cryptocurrency Scam Statistics: Alarming Predictions & Trends