Charity issues alert as sophisticated AI ‘scam sweatshops’ swindle Scots out of £700,000

Tech-savvy “scam sweatshops” have swindled more than £700,000 from Scots by using artificial intelligence (AI) to create hyper-personalised frauds, a debt-busting charity has revealed.

Advice Direct Scotland said international fraudsters are creating sophisticated scams in under two minutes using freely available AI apps such as ChatGPT.

AI computer systems are designed to perform tasks that usually require human intelligence.

This includes things like understanding language, recognising patterns, solving problems and even learning from experience.

AI scams

In the last eight months alone, the charity, which gives free advice on everything from benefits to housing, has helped people who have lost £707,907 – nearly £3,000 a day – to scam gangs.

The charity has also reported the rise of scam apps, which look as if they are from legitimate firms such as casinos or gambling companies but are used to steal money and ­personal details.

Andrew Bartlett, chief executive of Advice Direct Scotland, said: “As AI technology advances, scams are becoming more frequent and cunning. This is happening on an industrial scale with scam sweatshops set up to ­target people. Unfortunately, our current protections are falling short.

“The authorities can often only help with local scams and doorstep crimes. The police do a great job but are battling with the sheer size of the onslaught of scam reports.

“Our research shows these scammers can use AI to set up a scam in less than two minutes. This can then be tweaked, personalised and unleashed to cause havoc across Scotland and beyond. We are even seeing the use of scam apps, where people download an app which looks legitimate but is then used to steal money and ­personal information. We will be calling on all political parties to act now to help Scots who suffer at the hands of scammers.”

© Advice Direct Scotland

Advice Direct Scotland has developed a number of scam-busting ­initiatives while pushing for Scotland’s political parties to adopt tougher policies against scammers.

The charity is developing real-time scam tracking and alerts using a Scam Heatmap where verified reports are geolocated, allowing consumers to see local threats and stay vigilant. This centralised tool will be accessible online and via mobile apps. It is also calling for an annual Stay Scam Smart campaign to educate the public on common and emerging scams with a particular focus on AI-driven fraud. This could be implemented though workshops in schools, libraries and community centres.

And the charity wants to create a scam victim support unit offering advice and emotional support to those who have been targeted. This would co-ordinate with councils and police to give tailored support.

Targets of all ages

Bartlett added: “It is a mistake to think that only older people are falling prey to scammers. Younger ­people from what is termed Gen Z – the generation born between 1997 and 2012 – are increasingly targeted.

“They are a prime target for scammers as they spend more time online and are characterised by their upbringing in the digital age with widespread access to the internet and modern technology. It used to be the case that scams were given away by misspellings or poor grammar but AI can be used to sort those issues.

“Deepfakes have used video cloning software to create fake videos often featuring celebrities endorsing or promoting products that don’t exist. These videos aim to deceive consumers into believing the products are real.

“Scammers are also using AI to clone children’s voices, calling ­parents or family members and pretending the child is in trouble, to get money. These scams are often called ‘Hi Mom’ or ‘Grandparent’ scams.”

The news comes as Prime Minister Keir Starmer last week unveiled a huge expansion of the use of AI in the public sector. The UK Government plan recommends a 20-fold increase in the amount of AI computing power under public control by 2030.

The previous UK government announced plans in 2023 to base the £800 million Exascale computer at Edinburgh University. However, the new Labour administration shelved the project, citing a lack of funds.

Scottish Secretary Ian Murray said Edinburgh would still play a significant role in the government’s AI strategy, insisting the city “has a very bright future ahead of it”.

Katherine Hart, lead officer for the Chartered Trading Standards Institute in Scotland, said younger people were at a heightened risk from AI fraud.

She said: “As the younger generation are more used to cyber society they are also likely to be heavily ­targeted by these criminals.

“AI chatting can be difficult to spot as we are now used to ‘live chat’ but most websites will allow an option to contact a human or email directly. If in doubt, use alternative means of contact.”

Protect yourself

If you’ve been contacted by someone and suspect they might be trying to scam you, here’s what you can do to stay safe.

• Don’t send money or buy anything. Always do your homework before agreeing to anything, such as checking online reviews.
• Never give out personal information, bank details, passwords or PINs. If you’ve already shared this information, change all passwords and PINs and notify your bank.
• Don’t download attachments or click on links in emails. If you have, ensure your device’s security is up to date and run a virus scan.
• Don’t call any numbers received in an email or letter especially premium rate numbers. If unsure about the cost of dialling a number, contact your service provider for advice.
• Don’t let them into your house. If someone you’ve allowed in refuses to leave or if there are suspicious people in your area, call the police.
• If you receive unexpected calls, emails or messages, be cautious. Scammers often use AI to make convincing deepfake videos or voice messages.
• Ensure your devices have up-to-date antivirus software and consider using digital tools to protect against phishing scams, deepfakes and spam.
• Stay informed about the latest AI scams and how they operate. Knowledge is your best defence against falling victim to sophisticated frauds.

For free, impartial advice, contact Advice Direct Scotland’s service at consumeradvice.scot

You can reach help via freephone at 0808 164 6000 or online through web chat and email at consumeradvice.scot Report scams at scamwatch.scot