The adoption of Artificial Intelligence (AI) has become the latest selling point for many businesses in the investment industry, AI aims to improve the investor experience by making better, more informed decisions than investment advisors or you, yourself could make. AI enabled advisors, for example, are marketed as better able to determine your risk profile and assign an optimal investment mix.
Sounds great – what’s the issue?
With all of this potential benefit comes an equal amount of risk investors should be aware of. Unfortunately, highly motivated and technically savvy fraudsters have also begun exploring new ways to scam investors with the use of AI.
What makes AI risky?
- Unfamiliar territory – AI models are advancing everyday with innovative and malicious strategies developed, tested and improved constantly – it is difficult to predict how it will be used and to whose advantage;
- Digital footprint – Many of us share personal information through social media, bank and invest online, and unknowingly have our data batched and sold by 3rd parties – staying truly private is difficult. We never know who has access to what part of our data and how it is being used;
- Anonymity – AI technology can be rolled out by anyone from anywhere in the world. It can be virtually impossible to locate perpetrators and get your money back.
How can AI be used against me?
- Deepfakes and impersonations – AI technology is used in the creation of audio and videos to mimic the actions and words of celebrities, family members, colleagues, friends, and everyone in between;
- Phishing attacks – Fraudsters can create legitimate looking emails and messages and even train their models to continuously improve their effectiveness;
- Account takeovers – AI-driven bots can effectively crack passwords and gain access to your online investment accounts;
- Personalized fraud – As a result of the information we share with the world there is virtually no end to how personalized attacks can be.
How can I protect myself?
- Verify – If someone you know has called, messaged, texted or emailed you to ask for money or an investment, it is critical to ensure the person and message are legitimate. It is very easy to impersonate people when not face-to-face.
- How do I verify? Hang up and call them back at a known number, contact them through an alternative method, or ask them a question only they would know the answer to;
- Be proactive – Create a safety word with friends and family to use to ensure you are speaking with the real person and always be suspicious when contacted with an investment opportunity;
- Secure your online practices – Be aware any information you share online can become public. Use strong passwords and enable 2-step verification for your investment accounts, do not give others remote access to your computer or device, and be cautious when downloading apps;
- Research – Try to avoid making emotional decisions around investing. If offered an opportunity, commit to taking time to research the investment and the person or company making the offer.
- Are they registered? Find out how to check if a firm or advisor are registered with CIRO.
Examples of AI Fraud
Elon Musk and Justin Trudeau Deepfake
An Ontario man was persuaded to invest thousands of dollars by who he believed to be Elon Musk and Justin Trudeau. A deepfake video was convincing enough in cloning the widely circulated voices and facial expressions to seem as though the pair were recommending a successful investment opportunity. Only after it was too late did he realize it as a scam.
In January 2024, CTV News Ottawa aired a story to alert viewers of an ongoing cryptocurrency scam. Two weeks later, with the help of AI technology, fraudsters manipulated the video and shared it on social media to make it seem as though the news cast were endorsing an investment opportunity.
The Fake CEO
There have been instances of scammers using voice clones of senior representatives of banks and other large companies. The scammers would call these offices, posing as CEOs and managers of the respective corporations, and instruct staff to initiate money transfers into their bank accounts.