The Toronto Police Service is seeing more and more scams utilizing Artificial Intelligence tools, which investigators say is making fraud increasingly difficult to detect.
“We’ve been asked about AI for probably the last two or three years… We hadn’t really seen the impact of it yet until probably halfway through 2025,” Det. David Coffey, the head of the police service’s financial crimes unit, told CP24.com this week. “That’s when we really started feeling the impact and that is when it took off like a rocket.”
He said while the scams have not changed, the “psychological manipulations” of scammers “are far more targeted” now with the use of AI tools.
“It’s romance scams. It’s impersonation. It’s the fraudulent bank investigator, fraudulent police officers, fraudulent this, fraudulent that… But what AI has allowed the fraudsters to do is make the scams far more convincing, far more compelling,” he said.
“It’s lowered the entry point for the fraudsters themselves because they can go on to websites now and be taught how to do frauds.”
Even six months ago, he said, fraud was easier to spot than it is today, adding that it is not uncommon now for scammers to know the last four digits of your bank card, your email address, and even the names of family members.
“They will know so much information about you… and it lowers people’s defences,” Coffey warned.
Most people, he said, don’t realize just how much of their personal information is available on the internet.
“AI is collecting (information) for the scammers, putting it in a nice neat little file for them, and they’re looking at it and they’re going, ‘OK, I can use this, I can use this, I can use this,’” Coffey said.
He added that corporate data breaches have also made personal information more accessible to fraudsters.
“I would challenge anybody who says that they haven’t lost already a portion of their information in a data breach,” Coffey said. “That information is out there.”
Victim losses have skyrocketed
In 2025, Toronto saw a slight decrease in the number of fraud reports but Coffey noted that the amount of money victims lost was actually higher than the previous year.
Toronto police had about 16,300 fraud reports last year, down from about 17,000 in 2024, but the veteran detective said $433 million was lost in 2025, a 17 per cent increase from the $370 million lost in 2024.
Across Canada, there has been a massive spike in the amount of money lost to fraud over the past five years.
In 2020, the Canadian Anti-Fraud Centre reported approximately $165 million in victim losses. At the end of 2021, that number jumped to $379 million and skyrocketed to an alarming $650 million in 2024.
With only about five to 10 per cent of frauds formally reported to authorities, Coffey said the actual dollar loss is substantially higher.
‘It destroys lives’
He said individual scams that typically result in the highest dollar loss are unsurprisingly the ones that go on for extended periods of time, such as romance and investment scams.
“It destroys lives. It’s not just financial, it’s destroying marriages. We’ve had homicides as a result of fraud. We’ve had suicide as a result of fraud,” Coffey added.
“It’s almost a daily basis where we’re talking people off the cliff... and then sending out help to them afterwards because they’re so emotionally distraught... it’s heartbreaking.”
He said a scam that often results in the most damage is commonly referred to as “pig butchering,” which begins as a romance fraud and evolves into an investment fraud.
He said the scam often begins with “grooming” someone over a period of months before offering up more information about an investment opportunity.
He said many people lose hundreds of thousands of dollars to this type of fraud.
“They show you this fraudulent website that they’ve created, and they say, ‘Wow, your $10,000 that you gave us last week is now $100,000…. so it accumulates.”
“They’re psychologically brilliant, how they do it... It starts off small and just gets bigger and bigger and bigger and bigger.”
He said investigating these types of scams can be difficult as the money is moved to other jurisdictions.
“Until things change drastically, until we formulate processes with crypto exchanges where we can reach out and pull it back without needing MLAT (Mutual Legal Assistance Treaties) orders and search warrants and all this kind of stuff… it’s infinitely challenging,” he said.
“That’s why awareness has to be everything. Prevention has to be everything.”
‘Just tell somebody’
March is fraud prevention month and Coffey said Toronto police will be working to get the word out about how people can protect themselves from scammers.
“Verify, verify, verify, and tell one other person. Just tell somebody, tell your spouse, tell your boyfriend, your girlfriend, your mother, your father… What the fraudsters want is your brain to start spinning,” Coffey said.
“They want your brain to go into this fight or flight mode where it’s being flooded with all these chemicals and adrenaline, because then they’ve got you.”
He said scammers frequently try to play on your emotions to get you to react with urgency and any random call you receive that makes you “immediately feel fear” should be a “massive red flag.”
“Canadian Border Services doesn’t call people and immediately say, ‘Unless you start sending us money, we’re going to deport you,’ Coffey said.
“The Minister of Transport doesn’t send you an email saying, ‘Send us money right now or your driver’s license is going to be cancelled today.’”
In September, he said the financial crimes unit had a surge in calls from parents who had been victims of a tuition scam.
“We had a rash of frauds from people being called the week before school started and… (fraudsters say), ‘Hey, you haven’t paid your tuition yet. Pay it now or you’re not going to be allowed to go to school,’” Coffey said.
“It’s the urgency. That’s still a universal tactic used by fraudsters.”
He said when receiving a random call from someone purporting to be from a legitimate agency or organization, people should disconnect the call, verify the correct contact information online, and then call that agency or organization back.
“Fraudsters will stay on the phone with you for hours, because they know as soon as they hang up, you’re going to do two things. You’re going to start thinking that doesn’t sound right, and you’re going to tell somebody. And then they’ve lost you,” he said.
“One of the things I hate to see most are are all these Bitcoin machines that are in these mom and pop variety stores... You will see seniors (walk in) and start just putting money into them and... they’re still on the phone.”
Concerns mount over AI and fraud: poll
Coffey said that people need to be even more vigilant in guarding against scams as AI becomes more commonplace in fraud.
Survey results released by TD Bank last month found that Canadians are feeling “increasingly threatened by the next generation of financial fraud.”
According to the poll, about three in four Canadians said that AI advancements make them feel “more vulnerable to financial fraud.” About 82 per cent, according to the survey, said they believe that scams are becoming harder to detect.
“We have to be skeptical and question,” Coffey said.
“Everything we see and everything we hear, we have to do everything we can to verify. We can’t take anything at face value anymore.”
