AI Investment Scams Are On The Rise — Here’s How To Protect Yourself
Written by
Josephine Nesbit
Edited by
Cory Dudak
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AI investing is a growing trend that uses software and algorithms to analyze market trends and make predictions based on historical data while considering price volatility and risk. But now, scammers are turning to the AI hype as a means of tricking investors and stealing their money.
California’s Department of Financial Protection and Innovation said that most investment platforms today offer some sort of mobile AI investing apps, AI trading bots or website designs that integrate AI technology into investing strategies. The DFPI reported an increase in investment scams that claim to use artificial intelligence to make money for investors. These types of frauds claim that their AI can trade crypto on behalf of investors and generate “too-good-to-be-true” profits.
The Autorité des marchés financiers (AMF) has also warned about the increase in investment scams using AI technology.
“Scammers can… use deepfakes to make anyone say anything in order to get you to, for example, put money into totally fictitious investments,” the AMF said, as reported by Investment Executive.
However, the DFPI said there are steps you can take to protect yourself. Here’s how:
- Be aware that many investment platforms that claim to trade crypto on behalf of investors are scams.
- Be wary of investment platforms that claim to use AI to generate returns for investors. These claims are often lies to trick investors to handing over their money, often in the form of crypto assets.
- Watch out for people promoting investment opportunities on online platforms. The DFPI regularly tracks new scams on YouTube and other platforms.
- An investment opportunity that asks you to recruit other investors, such as a Ponzi or pyramid scheme, is typically a red flag.
- Be wary of investments that promise high returns with little risk.
Scammers also use buzzworthy terms to entice investors, and use AI to create people who don’t really exist, deepfakes or clone voices.
“Deepfakes are now prevalent on most social media platforms and the internet,” the AMF added, noting that the tech can also be used to create fake people with online profiles to trick investors.
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