Investors need to stay vigilant against a growing wave of AI-powered investment scams as AI becomes more sophisticated.
From convincing chatbots to realistic deepfakes, fraudsters are increasingly using AI tools to mislead and manipulate. These scams are becoming harder to detect and more costly to investors, the Washington State Department of Financial Institutions, or DFI, and the North American Securities Administrators Association, or NASAA, warn.
Each year, North American investors lose billions of dollars to fraud, with losses continuing to rise steadily.
“It’s more important than ever for investors to recognize the warning signs of fraud and understand how AI is being used to deceive,” Charlie Clark, director of DFI, said in a statement. “Investors are their own first line of defense. By pausing, thinking critically, and doing your research, you can avoid falling victim to AI-driven scams.”
Use the following steps to safeguard your investments:
- Verify registration: Visit the office that regulates investments in your state and confirm that the individual or firm is registered to sell investments. To find out the agency to contact, see the NASAA website. Also, see the U.S. Securities and Exchange Commission’s www.investor.gov.
- Check for warnings: Look up alerts and enforcement actions by your state.
- Understand the technology: Learn how AI tools work and how they can be used to manipulate. See the NASAA Investor Alert: Artificial Intelligence (AI) and Investment Fraud.
- Report suspicious activity: File a complaint with your state regulator to report scams or suspected financial exploitation.
Be cautious if you encounter:
- Promises of guaranteed high returns with little or no risk.
- Pressure to act quickly or secrecy around the opportunity.
- Unanswered questions or vague explanations.
- Use of personal relationships or social networks to build trust.
For more information on AI-related investment scams and how to protect yourself, visit the website of the investment regulator in your state.
