AI Tools Fuel Expense Fraud: Forgeries Barely Recognizable Anymore

AI tools are enjoying increasing popularity among employees—and this also applies to expense fraud. Employers and service providers in expense processing are noticing a significant increase in forged receipts, reports the Financial Times. They attribute this to the fact that the image-generating capabilities of AI chatbots like ChatGPT have significantly improved. While receipt forgeries used to be immediately noticeable due to visible spelling errors, the receipts are now often indistinguishable from the original.

The AI financial automation platform AppZen found based on its data that 14 percent of fraudulent receipts in September were AI-generated. The previous year, there were none. Expense fraud with forged receipts is nothing new, however. Previously, however, knowledge of image editing tools was necessary, or paid services were used.

Increase Since GPT-4o

Since the release of GPT-4o, the number of forged receipts has increased, the FT quotes financial experts from the USA and Great Britain. 30 percent of respondents report an increase. The damage to the affected companies runs into the millions. The quality of AI forgeries is high. Exposed receipts contain realistic paper folds, detailed item lists, and match real menus.

Companies, in turn, are also using AI tools to expose AI-generated forgeries. The software checks, among other things, the metadata of the images, which can, however, be easily removed through screenshots or by printing and photographing them. However, the verification tools also look more closely at times, personal names, and travel information to detect discrepancies. OpenAI is also involved and wants to take measures against violations of its guidelines, the company told the FT.

Great Understanding for Fraud

In Germany, according to a survey by software manufacturer SAP, 53 percent of employees have no objection to expense fraud. The survey company Opinium Research had questioned 2500 people for this. Up to an amount of 106 euros, respondents considered it acceptable to submit a knowingly false expense report. According to the manufacturer of the administrative software Concur, 15 percent of all companies are affected by expense fraud. German companies with up to 250 employees lose almost 14,000 euros annually through expense fraud. Particularly popular are private restaurant receipts or claiming privately used office equipment.

According to the survey, employees justify expense fraud with “fairness reasons.” They want to compensate for unpaid overtime or additional home office expenses.

Expense fraud is not a minor offense. It fulfills the criminal offenses of fraud and forgery of documents. While labor courts increasingly decide on a case-by-case basis and sometimes consider a warning sufficient, expense fraud can justify immediate termination.

(mki)