The United States Department of the Treasury has leveraged artificial intelligence (AI) in fraud detection processes, resulting in the recovery of nearly $375 million during 2023. The Office of Payment Integrity within the Treasury initiated the use of AI to combat escalating levels of fraud, which began to rise with the onset of the COVID-19 pandemic in 2020.
"The Treasury Department is committed to safeguarding taxpayer dollars through payment integrity – paying the right person, in the right amount, at the right time, and ensuring that Social Security payments, tax refunds, and other types of checks, and people who are receiving them, are safe from fraud," stated Deputy Secretary of the Treasury Wally Adeyemo. "We are using the latest technological advances to enhance our fraud detection process, and AI has allowed us to expedite the detection of fraud and recovery of tax dollars."
Check fraud has surged since 2020, with a nationwide increase by 385% since the pandemic's inception. The integration of AI bolstered expediting processes leading to significant recoveries in potential fraudulent payments originating from financial institutions. According to a press release by the Department of the Treasury, check fraud has been on a steady incline with 350,000 suspicious activity reports filed with Financial Crimes Enforcement Network (FinCEN) concerning potential check fraud in 2021. This marked a 25% increase compared to report filings in 2020. In 2022, this number rose even further with over 680,000 reports filed regarding check fraud. The implementation of AI systems has aided consumers across the country in avoiding becoming victims of such fraudulent activities.
The government's use of AI has been expanding rapidly as its application becomes more widespread. In August 2023, for instance, the Department of Defense (DoD) established a generative artificial intelligence task force aimed at harnessing AI's power for strategic solutions. A press release by the DoD stated that this task force has contributed to minimizing risk and redundancy while identifying new mechanisms of use for AI technology to fortify the defense of the United States.
