Investment Fraud a Bigger Problem in the AI Age

Artificial intelligence is making fraudster’s jobs easier – even as investment scams are expanding.

Investment fraud is on the rise in the U.S.

According to the U.S. Federal Trade Commission, over $3.82 billion was lost to investment fraud in 2022 – that’s up 128% from 2021 when artificial intelligence hadn’t yet landed with businesses and consumers.

Now AI is making financial fraud even easier for scammers.

“Due to AI, previous scam awareness tips such as proofreading for poor spelling and grammar, or poor use of English, aren’t relevant,” stated U.K.-based “Chat GPT allows fraudsters to create convincing emails and messages with very little effort.”

There’s more.

AI allows fraudsters to “mimic voice, and even bypass certain forms of verification,” notes.

That spells trouble on the investment fraud front as reports are leveraging AI to their benefit when trying to fleece unsuspecting investors.

“Social media platforms like TikTok have seen sharp increases in financial disinformation that often serve to benefit faux-financial gurus who benefit from driving referrals to investment opportunities without giving clear information,” the company stated in a new report.

Fraudsters are getting clever in using AI to promise investors generous returns – but they’ll have to fork over some cash first, usually digitally and in a way that’s difficult to track, the company noted.

Fighting Back Against AI Finance Fraud

What can investors and finance industry professionals do to either curb or eliminate AI-based investment fraud? Look for some key red flags, for starters.

“Watch out for investments that promise high returns with little risk and be sure to do comprehensive research before handing over money,” says Nicholas Crouch, a lead analyst at

Budding investors should also be aware of opportunities that ask you to recruit new investors; these often operate as Ponzi or pyramid schemes that “while benefiting those at the top of the pyramid, very rarely benefit others involved”, Crouch notes.

“Additionally, be conscious of the financial information you learn online, particularly on social media. “There is an increasing amount of financial disinformation around investing that lures investors into sophisticated scams,” Crouse adds.

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