Better Business Bureau Warns About Dangers of AI-Fueled Identity Theft

Over 16,000 reports of identity theft have been made to the Better Business Bureau the last three years, as criminals exploit artificial intelligence to enhance their schemes and target Americans’ personal information at unprecedented levels.

Key Insights

Identity theft is projected to escalate in 2025, with AI-powered scams driving the increase in sophistication and success rates.
Americans lost over $125 million to identity theft in 2023 according to FBI data, with the FTC recording more than 840,000 identity fraud cases in 2024.
SIM swap fraud has surged by an alarming 1,055%, while account takeover cases increased 76% in 2024, with over half involving mobile phone hijacking.
Criminals are using AI to create convincing false documentation that can pass verification checks, impersonate victims to rent apartments, and open fraudulent credit accounts.
Experts recommend a two-pronged approach: proactively protecting personal data through multi-factor authentication and credit freezes, while regularly monitoring accounts for suspicious activity.

AI Transforms Identity Theft Into a National Crisis

Identity theft has evolved from isolated incidents to a sophisticated criminal enterprise, with artificial intelligence serving as the new weapon of choice for scammers. The Better Business Bureau of Missouri reports that identity theft will continue its upward trajectory into 2025, fueled by criminal organizations using technology such as AI. This technological arms race has left many Americans vulnerable as criminals leverage AI to create convincing impersonations that fool both automated systems and human verification processes.

The scale of the problem is staggering. In 2023 alone, American consumers lost over $125 million to identity theft, according to FBI data. The Federal Trade Commission has already documented more than 840,000 identity fraud cases in the United States in 2024. Fraud prevention service Cifas highlights particularly troubling trends, including a 76% increase in account takeover cases and an eye-opening 1,055% surge in SIM swap fraud, where criminals hijack mobile phone numbers to intercept security codes and verification messages.

These criminals don’t just stop at financial accounts. The BBB reports scammers are impersonating average people in order to do things like get apartments or credit cards, creating comprehensive false identities that can wreak havoc on victims’ credit and financial standing for years to come. The rising prominence of dark web marketplaces compounds the problem, with personal information being traded like commodities between criminal networks.

The Dark Web Multiplies Identity Theft Risks

Data breaches have become a significant pipeline for identity theft, with compromised information flowing directly to illicit marketplaces online. “We do want people to know there’s many sites on the dark web where someone’s information may be getting shared,” warns Michele Mason of the Better Business Bureau. These underground markets exist across the internet ecosystem, from easily accessible surface web sites to the heavily encrypted dark web, where criminals can purchase everything from Social Security numbers to complete identity packages.

The theft of personal information exists on a spectrum. Brian Edwards of the BBB explains, “Sometimes just pieces of information are stolen, say it’s an email or a phone number and that’s people getting those spam texts from scammers or getting spam emails… Those scammers have stolen your information from somewhere and are using those to try and perpetuate a scam.” These smaller data points serve as building blocks for more elaborate fraud schemes, allowing criminals to gradually piece together comprehensive profiles of potential victims.

What makes this new wave of identity theft particularly concerning is the enhanced speed and sophistication that AI brings to the criminal toolkit. Scammers can now rapidly generate false documentation that passes verification checks, create deepfake videos for social engineering attacks, and automate phishing campaigns at unprecedented scale. Law enforcement agencies face significant challenges in combating these crimes, as many originate from international actors operating beyond US jurisdiction.

Protecting Yourself in the AI Era

The Better Business Bureau recommends a two-pronged defense strategy against identity theft. “One is to protect our data, make sure we’re not giving it out to unknown sources. The second is to monitor our information, especially if we find out there’s a chance our information got compromised in a data breach,” advises Michele Mason. This approach acknowledges the reality that even with careful precautions, data breaches at companies where you do business may still expose your information.

Specific protective measures include placing credit freezes with the major credit bureaus, enabling multi-factor authentication on all important accounts, securing home internet connections, using robust and unique passwords for different services, and being vigilant about suspicious communications. Regular credit monitoring can provide early warning of unauthorized accounts, while dark web scanning tools may alert you if your information appears on criminal marketplaces. Suspected identity theft can be reported through the BBB Scam Tracker, FTC, or FBI.