For years, the standard advice for avoiding scams was relatively simple: look for spelling mistakes, poorly designed websites, strange email addresses and offers that sound too good to be true. Unfortunately, artificial intelligence is changing the game.
Today’s scammers can use AI to produce convincing emails, professional-looking investment websites and even videos or telephone calls that appear to feature people you know and trust. For retirees, who may have accumulated significant savings over a lifetime, understanding these new risks is becoming an important part of financial planning.
The Financial Markets Authority (FMA) has recently launched an Inside a Scam series to help New Zealanders understand how modern investment scams operate. One area it highlights is the growing use of “deepfakes” — artificial intelligence used to create realistic-looking video, images or audio of people saying or doing things they never actually said or did.
Imagine scrolling through Facebook and seeing what appears to be a well-known New Zealand businessperson, television personality or politician talking enthusiastically about an investment opportunity. The video may look genuine. The person’s face, voice and mannerisms may all seem familiar. But none of it may be real. The purpose is to give an investment an appearance of credibility. A scammer might then direct you to a professional-looking website, invite you to join a WhatsApp group, or encourage you to make a relatively small initial investment. The danger is that the scam often doesn’t end with the first payment. A fake investment platform may show your investment increasing in value, encouraging you to put in considerably more money.
There can still be clues that a video has been artificially created. The FMA suggests looking for unnatural facial expressions, unusual blinking, lip movements that don’t quite match the speech, strange lighting or a voice that sounds slightly wrong. But AI is improving rapidly, so relying on your ability to spot a fake may not be enough. A much safer approach is to change the way you respond to investment opportunities.
First, never make an investment simply because someone you recognise appears to recommend it online. Independently check whether that person or organisation really has endorsed it.
Second, be suspicious of urgency. Scammers often tell people they must invest immediately or risk missing an opportunity. Legitimate investments should give you enough time to investigate and think.
Third, be particularly cautious about promises of unusually high returns, guaranteed profits or “exclusive” investment opportunities. No legitimate investment can guarantee attractive returns without risk.
And finally, talk to somebody before transferring a substantial amount of money. That might be your financial adviser, accountant, bank, partner or adult child. A second pair of eyes can pick up something you have missed.
The FMA also maintains warnings about suspicious investment businesses and recommends checking independently who you are dealing with rather than relying on information or links supplied by the person offering the investment.
Retirement planning isn’t just about earning a good return on your savings. It is also about protecting what you already have. One useful approach is to create your own personal rule: never transfer a significant amount of money to a new investment on the same day you first hear about it. Take your time and get professional advice.
Artificial intelligence may make scams increasingly convincing, but scammers still rely on one very human weakness — getting us to act before we have had time to think. In the age of AI, perhaps the most valuable investment skill of all is simply knowing when to stop and check.
