Treasury now using AI in fraud detection

Artificial intelligence is helping the Treasury Department find hidden patterns and bust fraudsters, using the technology to recover $1 billion in fiscal 2024 alone, almost three times the previous year.

According to the data shared with CNN, the department has credited AI with helping it prevent and recoup more than $4 billion worth of fraud this fiscal year, a six-fold increase from 2023.

The Treasury distributes some 1.4 billion payments yearly, totalling over $6.9 trillion. These include Social Security and Medicaid payments to federal worker paychecks, tax refunds, and stimulus checks. Due to its role, criminals target the Treasury to try and steal from taxpayers.

In a release last week, the department said it has been using machine learning, which analyzes large quantities of data, to detect the patterns fraudsters most commonly use.

The technology is much needed since, according to estimates from Juniper Research, online payment fraud is expected to surpass $362 billion by 2028.

At the same time, AI also introduces risks, as shown by some fraud cases where criminals have used artificial intelligence tools to trick people.

The Treasury plans to expand the use of the tech and work with state agencies to improve fraud detection, but human oversight remains essential in making final decisions.