Humans are startlingly bad at detecting fraud. Even when we’re on the lookout for signs of deception, studies show, our accuracy is hardly better than chance.
Technology has opened the door to new and more pervasive forms of fraud: Americans lose an estimated $50 billion a year to con artists around the world, according to the Financial Fraud Research Center at Stanford University. But because computers aren’t subject to the foibles of emotion and what we like to call “intuition,” they can also help protect us. Here’s how leading fraud researchers, neuroscientists, psychiatrists, and computer scientists think technology can be put to work to fight fraud however it occurs—in person, online, or over the phone.
1. Suspicious Story Lines
Spam filters are supposed to block e-mail scams from ever reaching us, but criminals have learned to circumvent them by personalizing their notes with information gleaned from the Internet and by grooming victims over time.
In response, a company called ZapFraud is turning to natural-language analytics: Instead of flagging key words, it looks for narrative patterns symptomatic of fraud. For instance, a message could contain a statement of surprise, the mention of a sum of money, and a call to action. “Those are the hallmark expressions of one particular fraud e-mail,” Markus Jakobsson, the company’s founder, told me. “There’s a tremendous number of [spam] e-mails, but a small number of story lines.”