Transmit Security Warns: AI Agents Are Blinding Fraud Detection Systems — And the Industry Isn’t Ready

Transmit Security Warns: AI Agents Are Blinding Fraud Detection Systems — And the Industry Isn’t Ready

Transmit Security's Blinded by the Agent research reveals a looming crisis: consumer AI agents are defeating traditional fraud detection methods, and enterprises are unprepared. AI agents, such as OpenAI's ChatGPT Agent, operate on behalf of users across platforms, creating new blind spots. These agents bypass behavioral biometrics, device fingerprinting, and bot detection systems originally designed to analyze human behavior.

“Fraud controls today were built for a world where humans click the buttons. But now, AI is clicking them for us — and the systems can't tell the difference between AI operated by legitimate users and AI operated by fraudsters,” said Mickey Boodaei, CEO and Co-Founder of Transmit Security. “If we don’t act now, the rise of agentic AI will break the fraud stack as we know it.”

Key Findings from the Report

• Over 60% of online traffic to retailers is already bots, not humans. With AI agents acting on behalf of consumers, this number is expected to surpass 90% soon.
• Fraudsters are increasingly leveraging legitimate AI agents, effectively blinding core fraud detection layers.
• Fraud losses are projected to increase by up to 500% over the next few years due to detection breakdowns.
• Current fraud systems are flagging legitimate AI agent transactions, causing false declines and harming customer experience.
• Fraud teams will face 2–3 times more operational workload in the next 12–18 months to maintain current protection levels.

“This is not just about fraud — it’s about trust,” added David Mahdi, CIO of Transmit Security. “When the AI agent becomes your user's digital proxy, your systems must adapt. Identity, fraud, and authentication platforms need to be re-architected to recognize and verify intent — not just inputs.”

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Why Current Fraud Detection Fails Against AI Agents

• Behavioral biometrics fail without human signals, a fundamental flaw in an agent-driven environment.
• Device fingerprinting breaks down as AI agents operate from shared cloud environments, appearing as new devices every session.
• Bot detection filters approve known AI agents blindly, lacking visibility into whether the agent is controlled by a legitimate user or a fraudster.
• Financial institutions and online merchants lack predictive AI systems capable of detecting fraud hidden within agent-generated activity.

“We’re entering a world where every customer will eventually have their own AI assistant. If your fraud and identity stack can’t handle that shift, you’ll either drown in false positives or be blindsided by invisible fraud,” concluded Mahdi.

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About Transmit Security

Transmit Security is redefining identity security by unifying identity management, authentication, fraud prevention, and identity verification in a single, resilient platform. Mosaic by Transmit Security delivers best-of-breed services — modular by design, powered by AI, and purpose-built for digital scale. Trusted by seven of the top 10 U.S. banks and Fortune 500 enterprises, Transmit Security helps organizations eliminate identity silos, close security gaps, and accelerate innovation with identity-first protection.

Read the full report here:

Blinded by the AI Agent - July 2025

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Contact

David Mahdi CIO, Transmit Security david.mahdi@transmitsecurity.com

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Source: Originally published at Business Wire on July 31, 2025.

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Frequently Asked Questions (FAQ)

AI Agents and Fraud Detection

Q: What are AI agents in the context of online transactions? A: AI agents are sophisticated programs that act on behalf of users across various online platforms. Examples include advanced chatbots like OpenAI's ChatGPT Agent, which can perform tasks, interact with services, and even make transactions as directed by a user. Q: How do AI agents bypass traditional fraud detection systems? A: Traditional systems often rely on behavioral biometrics (how a human interacts) and device fingerprinting (unique device identifiers). AI agents can mimic human behavior and often operate from shared cloud environments, making them appear as new or different devices, thus circumventing these detection methods. Q: What is the primary concern regarding AI agents and fraud detection? A: The main concern is that current fraud detection systems are not equipped to differentiate between legitimate AI-driven user activity and malicious AI-driven fraud. This makes it difficult to identify fraudulent transactions effectively, leading to increased fraud losses. Q: What are the projected consequences of AI agents on fraud losses? A: The report projects that fraud losses could increase by up to 500% in the coming years due to these detection system failures. Q: How do AI agents impact customer experience in relation to fraud detection? A: Current systems may incorrectly flag legitimate AI agent transactions as fraudulent, leading to false declines. This negatively impacts customer experience and can frustrate legitimate users. Q: What is the predicted impact on fraud detection teams? A: Fraud teams are expected to face a 2-3 times increase in their operational workload in the next 12-18 months to maintain current levels of protection against these evolving threats. Q: What is the solution proposed to address these challenges? A: The solution involves re-architecting identity, fraud, and authentication platforms to recognize and verify the intent behind actions, rather than just the inputs, and to adapt to AI-driven user proxies.

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Crypto Market AI's Take

The insights from Transmit Security highlight a critical challenge at the intersection of AI and security, a topic we closely follow here at Crypto Market AI. As AI agents become more sophisticated and integrated into daily online activities, including financial transactions, the traditional security frameworks are indeed becoming obsolete. This necessitates a shift towards more advanced identity verification and fraud detection methods that can understand the nuance of AI-driven interactions. Our platform leverages AI for market analysis and trading, and we recognize the double-edged sword of this technology – its potential for innovation and its susceptibility to exploitation. Keeping pace with these evolving threats requires continuous development of AI-powered security solutions that can adapt to new attack vectors, much like the need for dynamic risk management in the volatile crypto market. For those looking to understand the broader implications of AI in the financial sector, our articles on AI agents in finance and the evolving landscape of AI-driven crypto trading tools offer further insights.

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