Chatbots and deepfakes are among the AI tools used by fraudsters to rob investors of their hard-earned money

As artificial intelligence (AI) becomes more sophisticated, the Washington State Department of Financial Institutions (DFI) joins the North American Securities Administrators Association in urging investors to stay vigilant against a growing wave of AI-powered investment scams.

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. 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,” DFI Director Charlie Clark said. “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.”

DFI recommends the following steps to safeguard your investments:

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 www.dfi.wa.gov/10B. You may also wish to visit DFI’s investment scam tracker to learn more about scams reported in Washington State.