How Online Scammers Use AI To Steal Your Money

WIRED

Online shopping scams were the second most-reported type of fraud that resulted in $12.5 billion (yes, billion with a ‘b’) in losses in 2024 alone. These scams infiltrate homes by playing on emotions and using new generative AI techniques to make the unbelievable, believable. Today, WIRED's Andrew Couts takes a deep dive into online shopping scams.Credits:Director: Efrat KashaiDirector of Photography: Mar AlfonsoEditor: Jeremy Ray SmolikHost: Andrew CoutsLine Producer: Jamie RasmussenAssociate Producer: Paul GulyasProduction Manager: Peter BrunetteProduction Coordinator: Rhyan LarkCamera Operator: Jeremy HarrisGaffer: Salif SoumahoroSound Mixer: Sean PaulsenProduction Assistant: Shanti Cuizon-BurdenPost Production Supervisor: Christian OlguinPost Production Coordinator: Stella ShortinoSupervising Editor: Eduardo AraujoAdditional Editor: Sam DiVitoAssistant Editor: Fynn Lithgow

Transcript

00:00In 2024, online shopping scams were the second most reported type of fraud, contributing to $12.5 billion in losses.

00:07But you may not have heard of one of the newest scams targeting homes around America.

00:11Today, we're doing a deep dive into online shopping scams.

00:14This is Incognito Mode.

00:24The prevalence of fake websites rose 790% in early 2025.

00:29That's all thanks to AI, making it super easy to make a fake website that could look like a totally legitimate place.

00:35Maybe a store you already shop at.

00:37But the site is totally illegitimate and is there to just steal your money or your information.

00:41Scammers are now taking advantage of those sold out signs by setting up fake websites.

00:46So there's your Lowry's, there's your Canton.

00:49If we scroll down here and look at our AI generated friends,

00:53this guy down here with the Canton Farm Equipment t-shirt and his cowboy hat on,

00:56apparently he works for Lowry's Equipment too, because they're both right there.

01:01Scammers trick people into going to fake websites in a couple of different ways.

01:05One is to create URLs that are just one letter off from a legitimate business.

01:09Not only does the URL look almost the same,

01:11but the website looks identical to the site you were actually trying to visit.

01:14So you're not going to notice you're getting scammed.

01:16Another way they get you is a technique called DNS spoofing,

01:19where you type in the actual URL, but it takes you to the scammer site.

01:22The domain name system, or DNS, is basically the internet's phone book.

01:26When you type in a website, say wired.com,

01:29DNS converts wired.com into an IP address,

01:32which is actually how the computers communicate with each other.

01:34By corrupting the DNS cache,

01:36scammers essentially trick your browser into taking you to a fraudulent site

01:39instead of the one you were actually trying to visit.

01:41Once you're on the fake website, you're at the whims of whatever the scam is.

01:45They might try to trick you into placing an order that you're never going to get

01:48and stealing your credit card of information or taking your money

01:50or otherwise stealing your data.

01:52Really, whatever the scammer wants to do with a fake website,

01:54they're going to do it.

01:55Of course, that's just one type of scam you could encounter.

01:57Online shopping is a minefield these days.

01:59So here are some other scams you should look out for.

02:04AI is helping fuel all types of new scams.

02:07One AI-fueled scam is creating websites that sell products

02:10that don't actually exist or are nothing like they look in the photos.

02:13The way the scam used to work is that someone would set up a website

02:15and steal photos from another site and pretend to be selling those products.

02:19But that made it pretty easy to get caught.

02:20If you're searching for, say, a new couch,

02:23you're probably looking at a bunch of different websites

02:24and seeing a bunch of different photos.

02:26And when you land on the scam website,

02:27you might notice that those images were taken from another website

02:30and they might set off your alarm bells.

02:32With AI, scammers can create entirely new images of entirely new products.

02:36So you might buy a product that doesn't actually exist

02:38and you never receive anything,

02:39or you get something that looks nothing like what you saw in the photos.

02:42You see, I purchased this cat bed thinking I was going to get a legitimate cat bed.

02:47Why would I be such a fool? This is what I got instead.

02:49I kid you not, this is the size of the cat bed.

02:53These days, it's impossible to separate social media from shopping.

02:57The algorithms know you so well that you just get recommended things you just want to buy.

03:02But as with everything, scammers are there too.

03:04One common social media scam is fake coupons,

03:07where they offer you crazy deals on something you've been looking for,

03:09say 80% off a pair of nice sunglasses or a baby stroller.

03:13Then when you go to buy the thing you're looking for,

03:15you never actually get it, or they send you something that's totally different than what you

03:18ordered. One of the more advanced versions of this scam is where they get you to sign up

03:21for coupon subscriptions. They make you pay for a membership for coupons that

03:25are either worthless or never arrive. Another version of the coupon scam

03:29is the disgruntled employee scam. You may have seen this on TikTok or Instagram Reels,

03:33where someone claims to be a disgruntled employee who got fired or is about to quit.

03:37And so they're giving over their super secret employee discount code.

03:40When you go to purchase whatever you're trying to buy,

03:42the code works. But as you add items to your cart,

03:45you might notice that the shipping costs go up disproportionately, but hey,

03:49you're getting a great deal. So you probably don't care. Unfortunately,

03:52after you place the order, either you don't get anything,

03:55whatever you bought isn't what you were expecting.

03:57It's really easy to get goaded into impulse buys on social media.

04:00One scam takes advantage of this by having a fake going out of business sale,

04:04where you think everything in the store is 30 or 50% off and you go and you buy,

04:07say a nice luxury towel. But when you get it,

04:10it's just some cheap towel that you could have bought for $5 from anywhere.

04:13And if you go back and look at the page,

04:15that business is still going out of business over and over and over again.

04:19Is JoanBags.com legit? With AI generated owner photos,

04:23a brand new domain, fake claims, massive discounts,

04:26stolen images, and no real customer reviews. It's looking like a major red flag.

04:31One scam you've probably already experienced is fake shipping scams where you get a fake text

04:38message from UPS or FedEx that says your package has been delayed or they need some more information

04:43to deliver your package successfully. These scams work because everybody's buying so much online all

04:48the time. People kind of expect to get alerts for packages that might be on the way. When you click

04:52the links, however, they might ask you to insert your information that they're just going to steal,

04:56or they may even install malware on your device. This scam is mostly notable for just being so

05:03scummy. These scams can target you in all types of ways from emails to social media posts and online

05:08ads to crowdfunding platforms and even cold calls. These scams often trick people by creating a sense

05:14of urgency. For example, someone might ask you to donate to an animal shelter that's about to close.

05:19And if you don't donate, all the animals are going to get euthanized. That's a really potent way to

05:23get somebody to hand over cash really quickly. These types of scams spike around the holiday season

05:28when people are looking to donate to good causes. A particularly gross version of these pop up after

05:33almost every natural disaster. Charities will pop up seemingly out of nowhere and trick you into thinking

05:37you're giving to people who are really in need right then. But they're just taking your money and

05:41they're going to quickly disappear as soon as those events are out of the news. An unexpected scam is the

05:46sale of pets online. This is fueled by a scarcity of really highly desirable breeds, really rare ones.

05:51But the Better Business Bureau estimates that 80% of sponsored ads for pet sales could be fake.

05:57The Better Business Bureau says online puppy scams are easy to fall victim to because they appeal to

06:02people's emotions. One of the newest online scams starts by not being online at all. Known as brushing,

06:10this scam involves someone sending you a package that you didn't order and it doesn't have much

06:14information. The package you receive looks legitimate. It has your name and address on a label,

06:18but there's no return address. As you look at the package trying to figure out who sent it, where it

06:23came from, you'll probably spot a QR code, which you're expected to scan. This will take you to a website

06:28that looks totally legitimate, but it's not. The new unique scam involving a mysterious package showing up on your

06:34doorstep and an even more mysterious QR code. Then they mail or ship products, making it seem like a real

06:40transaction has taken place, and write a fake review posing as the person who received the product.

06:45Once you enter your personal information, then it's kind of like any other scam. Now they have your

06:49data and they can use it to target you for other scams, sell your data, or do any number of other

06:54things that might target you for future scams or fraud. So if you receive a package that you didn't

06:59expect and it only has a QR code on it, maybe just count it as a win and keep the free thing that you

07:03got and don't enter any information into any website that you don't trust. So what can you do to avoid

07:10getting scammed? First, make sure you're shopping at retailers you trust. Always pay close attention to the

07:15URL of the site you're visiting. Look for any extra characters or anything that might look off. As

07:19you're adding things to your cart, you might even want to take a step back and open up the site in

07:23another browser or on another device and go through the process again just to make sure everything

07:27looks legit. Always be skeptical of too good to be true deals. If something is way cheaper than it

07:32usually is, or they're offering you free deals, you might be getting scammed. Be suspicious of anything

07:37that's sent to you for free. If you're shopping from a smaller retailer that you found on social media,

07:42do some independent research and make sure that that site is legitimate. That means looking at

07:46online reviews that aren't on the website themselves, be on the lookout for any signs

07:50that a store is trying to trick you with pressure tactics like fake going out of business sales or

07:54other things that are going to add urgency to your purchasing experience. Ignore delivery text links.

07:59You should always be tracking your packages using lookup tools on the carriers you trust.

08:03If you're donating to charity, always do your research. Make sure the organization is transparent

08:08about how they spend their money and that they give you a way to contact them. They're using

08:12pressure tactics to donate immediately. That's a huge red flag. You can also use third-party

08:16websites like charity navigator that will tell you the legitimacy of an organization and whether

08:21you should donate to them. If you're unsure about any retailer, you can always look them up on the

08:25Better Business Bureau website, which will check complaints about those businesses.

08:31Online shopping scams aren't new, but they're getting smarter, faster, and harder to spot. So always take a

08:37breath before you click buy and make sure everything checks out. This has been incognito mode. Stay safe out there.

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