NYS warns of AI-powered scams as shoppers flock to deals on Cyber Monday

 With scores of shoppers looking for Cyber Monday deals online, New York State officials  warned Long Island consumers and others statewide about the increasing danger of artificial intelligence-powered shopping scams.

Last year, more than $17 million in losses were reported by New Yorkers who fell victim to online shopping scams, with another $41 million lost to related business impostor schemes, according to data collected by the Federal Trade Commission. To curb losses this year, the state’s Division of Consumer Protection is advising shoppers to be on alert for AI scams while shopping online.

“There are more and more fake websites and scammers out there trying to take advantage of New Yorkers purchasing gifts for their loved ones this time of year,” Secretary of State Walter T. Mosley said in a statement.

Online shopping scams, in which purchasers bought items  they never received or that were marketed fraudulently, were the most reported scams of 2024, according to the Better Business Bureau’s 2024 Scam Tracker Risk Report. With record spending expected for Cyber Monday, state officials  expected scammers to be out in force.

U.S. shoppers  were expected to spend $14.2 billion in online purchases Monday, a 6.3% increase over last year, according to estimates from Adobe Analytics. Spending  was expected to peak between 8 and 10 p.m., when $16 million in purchase transactions  were projected to occur every minute nationwide.

Many scams targeting online shoppers increasingly  rely on AI, which makes the holiday season a particularly risky time for online shoppers, experts have said.

Here are five things to know about AI shopping scams and how to avoid them.

What should I do when shopping with an unfamiliar retailer?

Shoppers should make sure to research the seller and be cautious about buying from online shops they aren't familiar with, according to the Division of Consumer Protection. 

Claire Rosenzweig, president and CEO of the Better Business Bureau of the metropolitan area, said especially during this time of year shoppers need to be more alert and  suspicious of businesses they may not recognize. 

“The fact is we’re in the holidays and we’re excited and happy ... but scammers are even happier because they’re always looking for those emotional times when our guard is down," Rosenzweig said.

How are scammers using AI?

“AI has democratized scams,” said Nick Nikiforakis, an associate professor of computer science at Stony Brook University. Nikiforakis, who specializes in cybersecurity, said in the same way AI has saved time and money for legitimate users, it does the same for criminals.

“In the past, you needed to know how to create pictures of fake products or hire it out ... Now, you don’t have to do any of this.”

What do shoppers need to be on the lookout for?

Shoppers should look out for fake websites and product ads that may appear legitimate, Nikiforakis said.

Since scammers often use AI to generate fake websites with the intent of luring real customers, Nikiforakis said shoppers should examine the URL, or website name listed at the top of their address bar, to see if it matches the website it claims to be.

Additionally, customers can enter a URL into Google and look at the top results for the website. Before clicking on the site, Google displays three vertical dots that when clicked give information about the site, Nikiforakis said. 

Fraudsters often make slight changes to the website's name, like replacing the number 0 with the letter O, the state said. 

Is shopping on social media safe?

Social media sites like Instagram or TikTok are prime places for scammers to advertise their fake or misleading web stores, according to a November report from Malwarebytes, an anti-malware software company in Santa Clara, California.

“With social media, everything is really fast and at your fingertips,” Rosenzweig said. “You have to be very careful.”

Rosenzweig said shoppers should avoid clicking links in ads they find on social media. If they want to make a purchase, they are safer searching for and visiting the website directly.

"The fact is that some of those ads may not be real," she said.

What are some signs that a site might be an impostor?

Scammers will often include AI-generated images of products to accompany their bogus listings. Shoppers should take a close look at what they intend to buy and scan for inconsistent details in an image, like blurry areas, or "objects that seem to fade away" in the image, the state said. 

Fake reviews are another common tactic used to make scam websites or links seem legitimate. Scam reviews can tend to be vague and lack details, come from accounts that were recently created and come batched with similar sounding reviews in a short period.