Workers at Doherty Staffing Solutions were perplexed when strangers started calling the office in response to recruitment texts — texts the firm never sent.

The Minneapolis-based staffing agency soon pieced together what was happening: Fraudsters, posing as Doherty recruiters, were sending fake job ads to individuals in an attempt to extract confidential information from job seekers.

The campaigns were sophisticated and personal.

Such impostor scams, when a criminal pretends to be a legitimate business or even a government official, are proliferating and morphing at an accelerated rate as artificial intelligence makes impersonation easier than ever.

“Generative AI has lowered the cost of producing a convincing fake. Even a website can be put together in a matter of minutes,” said Manjeet Rege, a University of St. Thomas professor and the director of its Center for Applied Artificial Intelligence.

“We used to always say, ‘Don’t believe until you see,’” Rege said. “Well, now I would say, don’t believe even if you see, and it looks very, very authentic.”

Impostor scams conned consumers out of $3.5 billion last year, nearly tripling in five years, according to a recent analysis by the Federal Trade Commission. About $1 billion stemmed from people impersonating legitimate businesses, often bankers or government officials.

Christopher Mufarrige, director of the FTC Bureau of Consumer Protection, said impostor scams are among “the most pernicious forms of fraud.”

In Minnesota alone last year, the FTC recorded 33,204 fraud reports in total, about $168 million in losses with a median loss of $340. Impostor scams accounted for about 37% of all reports.

Minnesota’s employment market took a major hit during the federal government’s immigration crackdown this winter and is still rebounding. Employment scams, especially in the staffing sector, are occurring across the nation as more people turn to the recruiting firms, according to the American Staffing Association, a trade group.

Fraudsters have been impersonating recruiting firms for some time, said Stephen Dwyer, CEO of the trade group, but industry members worry a sharp increase in the past year could cause lasting damage to their reputations.

Staffing agencies hire a significant portion of Minnesota’s workforce, placing employees in temporary jobs like manufacturing, transportation and building maintenance. In 2024, these firms employed roughly 247,000 workers across the state, according to the trade group.

“They think it’s a fruitful way to scam innocent people,” Dwyer said.

Doherty’s saga occurred earlier this month when the firm’s likeness was stolen by online scammers who were trying to get the text recipients to hand over their Social Security and bank account numbers to secure a job that didn’t exist.

Several of the text messages shared by the staffing firm show realistic, high-gloss images of beaming women donning blazers, all of them named “Emma Smith.” Some of the fake ads feature the real Doherty logo. They offer remote positions that require U.S. residency and a valid Social Security number.

Everything in the ads — including the women pictured in them — is bogus. An outside consultant conducted a forensic computer analysis and determined the photos were produced using AI, according to the firm. The business began an awareness campaign earlier this month alerting the public to the fraud.

Scams used to take the form of a mass text message with a link to a fake website, said Billy Doherty, the firm’s president. Over the past month, though, the fraudsters stealing his staffing firm’s likeness tailored scams to individuals based on their actual job interests, enabled by information taken from the internet, he said.

“To the naked eye, this looks fantastic,” Doherty said. “It looks like something that we made a deliberate effort to put in front of you.”

Government agencies are reporting accelerating losses to fraud, with impostor scams a leading cause.

Last year the FBI received nearly 22,000 complaints about AI-enabled scams. Losses in the category reached $893 million nationally, out of nearly $21 billion in total fraud attributed to computer crimes. The agency highlighted the improving capability of cybercriminals to clone a person’s voice or write “official-sounding emails,” making scams ever more difficult to detect.

Deepfakes and other advanced technologies could push the annual consumer fraud tally in the U.S. as high as $40 billion by 2027, according to a consulting firm Deloitte.

Much of the conversation of what makes people susceptible to scams is focused on age, cognitive impairment or tech savviness, said Marti DeLiema, a University of Minnesota social work assistant professor who studies why people fall victim to scams. But another piece is what DeLiema calls the “unmet need” factor.

“A person in a loving, fulfilling relationship is not going to be susceptible to a celebrity impostor romance scam. A person who is incredibly financially secure and feels really good about their financial outlook, probably isn’t going to be easily manipulated into investing in a new cryptocurrency,” she said. "
But if you have this unmet need, like for employment, you might be more open to engaging with potential offers that you see online."

Rege, the St. Thomas professor, said looking for visual tells to identify AI content is a losing strategy in the long term as the common red flags like blurry logos, odd phrases and misspellings disappear. He said there is a large gap between tools designed to flag potentially problematic AI content and the rollout between new models.

“It’s a cat and mouse game,” he said. ”By the time a detection method becomes reliable, the generation tools have often moved on to something it cannot catch."

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