Rise in AI-Enabled Customer Vulnerability Fraud Reported by MorganAsh

• •AI is being used to generate fraudulent claims of customer vulnerability.
• •Credit sector firms are struggling to dismiss these claims without prior assessments.
• •Fraudulent correspondence is often legally articulate and references FCA legislation.

MorganAsh has reported a significant increase in customer vulnerability fraud within the credit sector, driven by AI-generated claims. Firms are encountering highly structured and legally articulate correspondence from customers attempting to exploit regulations to avoid or delay debt repayment. The fraudulent claims often reference the Financial Conduct Authority's (FCA) legislation, complicating the dismissal of these cases without prior vulnerability assessments. This trend poses challenges for credit firms, as the sophistication of the claims makes it difficult to identify fraud without robust evidence. The managing director of MorganAsh, Andrew Gething, emphasized the need for vigilance in verifying claims to mitigate this emerging threat.