Apate uses AI agents to uncover fraud

AI-driven fraud detection has taken a provocative turn with the emergence of Apate.ai, a startup that deploys artificial intelligence agents to actively engage with scammers. While many organizations utilize AI to streamline operations or accelerate product delivery, Apate takes a counter-intuitive approach: its software agents pose as vulnerable victims to lure fraudsters into revealing their tactics and identities. This strategy transforms the traditional dynamic of cybercrime by forcing perpetrators to expose themselves before they can harm real customers.

Founded in 2024 and rooted in research conducted at Macquarie University in Sydney, the Australian company operates a vast network of digital personas. These agents are designed to mimic individuals across various demographics, including different ages, genders, and accents, while communicating in multiple languages. They interact with criminals through phone calls, text messages, emails, and social media groups. The goal is not just to waste time but to extract critical intelligence. So far, this fleet of undercover bots has consumed approximately 17 years of scammers’ time across 2.5 million conversations. More significantly, they gather data typically only accessible after a victim is defrauded, such as bank account details, cryptocurrency wallet addresses, malicious website links, and the specific brands being impersonated.

Turning the Tables on Cybercriminals

The rise of Apate reflects a broader shift in the cybersecurity landscape, where technology has increasingly empowered bad actors. In 2025, the FBI recorded over 22,000 complaints related to AI-assisted crimes, resulting in losses totaling roughly $893 million. A significant portion of this, exceeding $632 million, stemmed from investment scams where fraudsters utilized AI for conversation management and deepfake technology to mimic trusted figures like celebrities and executives.

Historically, scam-baiting was a hobbyist endeavor involving humans deliberately prolonging interactions with fraudsters. However, the sophistication of modern scams necessitates automated responses. The concept for Apate originated from a personal experience of founder and CEO Dali Kaafar. During a family picnic years ago, he received a call from an unknown number. Recognizing it as a scam, he engaged the caller for 44 minutes to entertain his children. This incident sparked a realization that those 44 minutes represented lost revenue for the criminal and wasted time for himself. Kaafar wondered if this process could be automated to yield actionable insights.

This curiosity led to academic research at Macquarie University, where Kaafar and his team applied machine learning and natural language processing to analyze scam communications. Their work focused on detecting patterns and developing methods to intercept fraud before it occurred.

Strategic Intelligence and Customer Impact

Unlike traditional security measures that react after damage is done, Apate’s model is proactive. “Most of the industry works after the fact. Telcos block numbers, but scammers just get new ones. Banks watch transactions, but by then the scammer has already reached the customer. We go to the scammer directly and get the information before anyone gets hurt,” explained Brad Joffe, co-founder and chief commercial officer. He added, “Our AI agents talk to tens of thousands of scammers every day across calls, messages, email, and the web. What we offer our customers is what comes out of those conversations, and what they can do with it.”

Apate employs both frontier AI models and proprietary fine-tuned systems trained on data from these agent interactions and Kaafar’s earlier research. Clients receive access to an insights portal that provides analytics on scams targeting their users, employees, or brand identity. Customers can even assign specific missions to the agents, such as extracting particular financial details.

Major institutions have already adopted this technology. Commonwealth Bank of Australia reports a 76% reduction in publicly reported scam losses since implementing Apate’s solutions. TPG Telecom has redirected nearly 590,000 calls to the AI agents, while another unnamed Australian bank used outbound agents to disrupt 22 distinct scam campaigns.

Market Expansion and Funding

The unique value proposition of Apate has attracted significant investor interest. In August, the company secured $8.15 million in seed funding from investors including Lobby Capital, OIF Ventures, Investible, Concept Ventures, and Baobab Ventures. With total funding nearing $10 million, the 20-person startup plans to use the capital for product development and international expansion, including establishing an office in London and strengthening its presence in the United States.

Apate, named after the Greek goddess of deception, embraces the irony of its mission. Joffe notes that the company incorporates evidence of scammers swearing at their bots into its pitch materials. “We track that as a sign of frustration and every swear word gets celebrated by us at Apate. We are probably one of the only businesses in the world that celebrates when people swear at our product.” This mindset underscores a broader trend where defensive technologies are becoming increasingly aggressive in protecting consumers from evolving digital threats.