The proliferation of artificial intelligence is fundamentally altering the landscape of online fraud, making deceptive schemes more sophisticated and difficult to detect for both consumers and businesses. This shift is highlighted in Experian's 2026 U.S. Identity Fraud Report, which indicates that fraud has evolved from isolated incidents to an integrated component of digital interactions across various channels.
Fraudulent activities now span phishing emails, scam texts, misleading advertisements, and account alerts, leveraging the growth of online banking, shopping, payments, and customer support. The report notes that AI significantly enhances the creation of these scams, enabling criminals to generate convincing imitations of emails, messages, websites, documents, voices, and even customer support interactions.
A substantial portion of consumers are aware of AI's role in these new forms of fraud. Approximately 60% have heard of scams involving AI-generated images or videos, 53% are familiar with AI-generated phishing messages, and 47% know about deepfake voice impersonation. This awareness contributes to nearly half of consumers feeling more vulnerable to fraud compared to the previous year. For businesses, AI-generated phishing is a primary concern, alongside document forgery, automated bot attacks, and the creation of synthetic identities.
The increasing sophistication of digital scams underscores the critical importance of robust identity verification. A significant 71% of consumers believe accurate online recognition is essential. Security measures such as behavioral biometrics are highly valued, making 83% of consumers feel secure, with banking app authentication, physical biometrics, ID verification, and passwordless login also ranking highly. Businesses are consequently employing multiple identity and authentication signals to assess risk, particularly during account opening to detect stolen credentials, synthetic identities, and manipulated documents.
Consumers expect digital services to be secure without introducing undue friction. While 84% are willing to undergo additional verification to prevent fraud, they prefer that extra checks be reserved for high-risk activities like opening new accounts, recovering access, or making high-value transactions. Routine activities from familiar devices, conversely, should require fewer steps. Adaptive authentication systems can help achieve this balance, and businesses are encouraged to measure fraud losses alongside false declines, abandonment rates, conversion, and customer satisfaction to understand the impact of security on the customer experience.
Data control and privacy are also central to building digital trust. Only 23% of consumers feel they have complete control over how their personal data is used online, though 56% desire this level of control. Consumers are generally willing to share information when they understand the benefits, with security and privacy being key motivators. Businesses share these priorities, making careful data governance a vital component of digital trust.
AI is not only a tool for fraudsters but also an increasingly common component of fraud management for businesses. Eighty percent of U.S. businesses already utilize machine learning or generative AI in their fraud management strategies, employing the technology to identify unusual behavior, detect manipulated documents, and reduce manual review. However, this increased reliance on AI necessitates robust oversight, including reliable data, model monitoring, and human review to ensure accurate decisions and maintain customer trust.
The emergence of AI agents further complicates identity verification. These AI tools are becoming integrated into online shopping and booking, with 31% of consumers having used them for such activities, and another 23% considering it. As AI agents begin acting on behalf of customers, businesses face new challenges in verifying the customer, the agent, their relationship, and the permissions granted. There is a risk of fraudsters impersonating legitimate agents, compromising authorized ones, or exploiting weak permissions. Businesses are beginning to explore "Know Your Agent" as an emerging capability for authentication and fraud control.
