Understanding AI Insurance Scams

AI-based insurance scams use advanced technologies, such as machine learning, deepfakes, and automated chatbots, to manipulate victims. These tools enable scammers to impersonate insurers, policyholders, or even customer service representatives with remarkable accuracy. Below, we outline some of the most prevalent AI-driven insurance scams currently affecting Ontario.

AI-Enhanced Phishing Emails and Texts

Scammers are now using AI to generate highly convincing phishing emails and text messages. These fraudulent communications often imitate well-known insurance companies or brokers, asking recipients to verify policy details or provide personal information. AI tools can personalise these messages using public data, making them more likely to bypass spam filters and fool recipients.

How to Protect Yourself:

• Verify any requests by contacting your insurance provider directly through official channels.
• Be cautious of emails or texts that contain urgent language or unusual requests.
• Look for subtle misspellings or domain name changes that indicate fraudulent activity.

Synthetic Identity Fraud

AI enables scammers to create synthetic identities by combining real and fabricated personal data. These synthetic identities are used to open fake insurance policies, which can later be used for fraudulent claims or to establish fake accidents and medical treatments. This type of scam is particularly challenging to detect, as the identity is a blend of authentic and false information.

How to Protect Yourself:

• Monitor your insurance statements and credit reports for unfamiliar policies or claims.
• Use secure passwords and multi-factor authentication for your online insurance accounts.
• Report any suspicious activity to your insurer and relevant authorities immediately.

Deepfake Customer Service Scams

A disturbing new trend involves scammers using deepfake technology to impersonate insurance agents or customer service representatives. These deepfakes can mimic the voices and faces of real individuals, tricking customers into revealing sensitive information or making payments to fraudulent accounts.

How to Protect Yourself:

• If you receive a call or video chat from your insurer that seems unusual, hang up and call them back using their official phone number.
• Be cautious when sharing personal or financial information over the phone or video calls.
• Stay updated on the latest scams by following trusted news sources and consumer alerts.

AI Chatbots for Fraudulent Claims

Fraudsters are also employing AI-powered chatbots to initiate or manipulate claims processes. These bots can deceive both customers and insurers, filing false claims or altering legitimate ones for financial gain. The automation behind these scams allows fraudsters to operate at scale, increasing the potential impact.

How to Protect Yourself:

• Ensure you are using your insurer’s official website or mobile app when filing claims.
• Report any suspicious interactions with chatbots to your insurer immediately.
• Request claim updates and confirmations in writing to ensure accuracy.

How Insurance Brokers and Companies are Responding

Insurance companies and brokers in Ontario are actively developing AI-based tools to detect and prevent fraud. These tools can identify suspicious activity in real-time, such as detecting anomalies in claims data or unusual login patterns. In addition, brokers are working closely with regulators, such as the Financial Services Regulatory Authority of Ontario (FSRA), to stay ahead of emerging threats and protect consumers.

Conclusion

AI-powered insurance scams are a growing concern in Ontario and across Canada, but vigilance and education are your best defences. By staying informed and taking proactive measures, you can reduce your risk of falling victim to these scams. Your insurance broker is also a valuable resource—don’t hesitate to reach out if you suspect any fraudulent activity or need guidance on how to protect yourself.

In this digital age, protecting yourself from AI-driven fraud is just as important as choosing the right insurance coverage. Together, we can navigate these challenges and ensure your insurance policies work for you—without interference from scammers.

‍