Where automated decisions went wrong

Pittsburg man loses $1,900 in AI-generated Trump investment scam

Wesley Skelton, a Marine Corps veteran from Pittsburg, California, was duped into buying 324 'golden eagles' for $2,500 after watching AI-generated videos of President Trump, Bank of America's CEO, and Elon Musk promoting the Golden Eagles Project. The videos, which appeared on Telegram, falsely claimed the collectible coins could be traded in for over $100,000 each at Bank of America. After discovering the items were worthless, Skelton received a partial refund of $600 from his credit card processor, but the seller did not respond. The scam highlights the use of AI-generated deepfakes to perpetrate financial fraud.

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Two Canadians lose $2.3 million in AI deepfake crypto scam

Two Canadians, one from Ontario and one from Prince Edward Island, lost a combined $2.3 million after being deceived by AI-generated deepfake videos. The Ontario victim lost $1.7 million after watching a fake video of Elon Musk, while the other lost $600,000 after seeing a clip falsely linked to the show Dragon's Den. The scam involved a fraudulent cryptocurrency investment scheme. The incident was reported on December 21, 2025.

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FunkSec Ransomware Group Targets 85 Victims with AI-Assisted Double Extortion

A new ransomware group called FunkSec has claimed over 85 victims since late 2024, using AI-assisted tools to develop its encryptor. The group employs double extortion tactics, stealing data and encrypting files, and demands ransoms as low as $10,000. Researchers suspect the group consists of novice actors recycling leaked data from previous hacktivist leaks, and some members have ties to hacktivist activities. The group also sells stolen data to third parties for $1,000 to $5,000.

Company involved

FunkSec

AI system involved

FunkSec

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French regulator fines Clearview AI €20 million for privacy breaches

France's privacy watchdog CNIL fined US facial recognition firm Clearview AI €20 million for unlawfully collecting and processing facial images of individuals without consent. The company scraped billions of images from websites and social media, selling access to law enforcement. Clearview AI denied being subject to EU law and refused to delete the data, claiming it was impossible to determine French residency from public photos. The CNIL ordered the firm to stop collecting data and delete existing data within two months or face daily fines.

Company involved

Clearview AI

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Arity collected drivers' data via apps for insurance scores

Popular smartphone apps including Life360, MyRadar and GasBuddy reportedly shared users' location and motion data with Arity, an Allstate-owned company. Arity used the data to calculate driving scores that could be sold to car insurers to set rates. Users were said not to be clearly informed that their data would be used for insurance pricing. Life360 and Arity stated that users had to opt in and that no personally identifiable driving data was shared without consent.

Company involved

Arity

AI system involved

Arity IQ network

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Xsolla fires 150 employees after big data analysis tags them as unproductive

Payment services company Xsolla terminated 150 employees at its Perm, Russia office after a big data analysis of their activity in Jira, Confluence, Gmail, chats, and documents tagged them as unengaged and unproductive. CEO Aleksandr Agapitov sent an email to affected employees stating that Xsolla was not for them, sparking backlash. The company later held a press conference, explaining the layoffs were due to slowing growth, and offered affected employees medical insurance and severance pay equal to four to six months' salary.

Company involved

Xsolla

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Zillow shuts down iBuying after algorithms cause $380 million loss

Zillow shut down its Zillow Offers iBuying business after its pricing algorithms, known as Zestimates, consistently overvalued homes. The company purchased thousands of homes at above-market prices and is now selling many at a loss, expecting to lose an estimated $380 million. Zillow attributed the failure to the algorithms' inability to accurately forecast home prices in a volatile market. The company will write off $569 million in home inventory and lay off 25% of its staff.

Company involved

Zillow

AI system involved

Zestimates

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Oracle faces US privacy class action over alleged surveillance of five billion people

Oracle is facing a class action lawsuit in California, alleging that its adtech and advertising subsidiaries collected vast amounts of data from internet users without consent, creating detailed profiles on approximately five billion people. The suit, filed by privacy advocates including Dr Johnny Ryan, claims Oracle's practices violate multiple federal and state laws. Oracle declined to comment on the litigation, which remains pending.

Company involved

Oracle

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UAE Company Loses $35 Million in Deepfake Audio Scam

Fraudsters used forged emails and deepfake audio to impersonate a company director, convincing a branch manager at a UAE company to transfer $35 million as part of a fake acquisition. The manager believed he was following instructions from the director and a US-based lawyer. The incident, which occurred in January 2020, led to a US federal court request for assistance in tracing the stolen funds. The case highlights the growing threat of deepfake technology in corporate fraud.

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Scammer uses AI deepfake to impersonate friend, steals $823,000 from Chinese businessman

In April 2023, a scammer used AI to impersonate a businessman's friend in a video call, convincing him to transfer 4.3 million yuan (S$823,000). The victim, Mr Guo, believed the caller was his friend after verifying the face and voice. After the transfer, he realised the deception and alerted police, who managed to recover 3.4 million yuan. Efforts to recover the remaining funds are ongoing.

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FMA Warns of Deepfake Impersonation Scam Targeting Kiwi Investors

The New Zealand Financial Markets Authority (FMA) has warned that a pump-and-dump scam using deepfake ads impersonating business leaders is targeting Kiwi investors. Victims are lured into WhatsApp groups via social media ads and encouraged to buy low-value shares, artificially inflating prices before scammers sell, leaving investors with losses. The FMA has received multiple complaints and is sharing information with overseas regulators, while urging the public to be cautious of unsolicited investment advice.

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Sky Gold subsidiary loses Rs 10.70 crore in deepfake scam

Starmangalsutra Private Limited, a subsidiary of Sky Gold and Diamonds, lost approximately Rs 10.70 crore after fraudsters used deepfake techniques to impersonate a director and trick an employee into transferring funds to unknown accounts. The incident was discovered on July 15, 2026, and the company reported it to cybercrime authorities and banks. Sky Gold stated there is no indication of broader IT system breaches.

Company involved

Starmangalsutra Private Limited

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Deepfake Zoom Call Steals Crypto Analyst's X Account

Mai Fujimoto's X account was compromised on 14 June 2025 after a Zoom call in which a deepfake impersonated an acquaintance. The attacker used the call to direct her to a malicious link, resulting in malware that also gave access to her Telegram and MetaMask accounts. Binance founder Changpeng Zhao warned that AI deepfakes make video-call verification unreliable.

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Knight Capital fined $12 million for 2012 trading glitch that caused $460 million loss

On August 1, 2012, Knight Capital Americas LLC's automated equity router malfunctioned due to a code deployment error, sending over 4 million erroneous orders into the market within 45 minutes. The firm suffered a loss of more than $460 million. The SEC charged Knight Capital with violating the market access rule and Regulation SHO, and the firm agreed to pay a $12 million penalty and retain an independent consultant.

Company involved

Knight Capital Americas LLC

AI system involved

Knight Capital's automated equity router

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CFPB fines General Information Services for inaccurate background checks

The Consumer Financial Protection Bureau took action against General Information Services and its affiliate e-Background-checks.com for failing to ensure the accuracy of employment background screening reports. The companies allegedly provided inaccurate criminal history information to employers, potentially affecting job applicants' eligibility and causing reputational harm. The CFPB ordered the companies to provide $10.5 million in relief to harmed consumers and pay a $2.5 million penalty.

Company involved

General Information Services

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Hong Kong tycoon sues Tyndaris over AI hedge fund losses

Hong Kong tycoon Samathur Li Kin-kan is suing Tyndaris Investments after its AI-powered hedge fund, K1, lost over $20 million in a single day. Li alleges that the system was not as sophisticated as claimed. The trial is set to begin in London in April 2020.

Company involved

Tyndaris Investments

AI system involved

K1

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Wells Fargo software error caused hundreds of faulty foreclosures

Wells Fargo disclosed that a software error in its mortgage modification underwriting tool caused incorrect denials of loan modifications for approximately 870 borrowers between 2010 and 2015. The error miscalculated attorneys' fees, leading to 545 foreclosures that should not have occurred. Wells Fargo set aside $8 million for remediation and is contacting affected customers to offer compensation and mediation.

Company involved

Wells Fargo

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Fraudsters use AI voice deepfake to trick UK energy firm CEO into transferring $243,000

In March 2019, criminals used commercially available AI voice-generation software to impersonate the CEO of a German parent company. They tricked the CEO of a UK-based energy firm into urgently wiring $243,000 to a Hungarian supplier. The fraud was discovered when the fraudsters attempted a second transfer, which the CEO refused. The company was insured and the loss was covered.

Company involved

Unnamed UK-based energy firm

AI system involved

Commercially available voice-generating AI software

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Deepfake video of Sam Bankman-Fried used in crypto phishing scam

A verified Twitter account posted a deepfake video of FTX founder Sam Bankman-Fried claiming to offer compensation to users of the collapsed exchange. The video directed viewers to a phishing website, ftxcompensation.com, that asked them to connect their crypto wallets and send funds with the promise of doubling them. The site's Ethereum address reportedly received over $1,000 in ETH. The account was later suspended.

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AI deepfake fraud dupes man into transferring $612,000

A man surnamed Guo, a legal representative of a technology company in Fuzhou, received a video call from someone impersonating his friend using AI to mimic the friend's face and voice. The fake friend asked Guo to transfer 4.3 million yuan to a bank account, claiming it was for a bid. Guo transferred the money and later discovered the fraud when he contacted his real friend. Police stopped part of the transfer and are investigating.

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California regulator accuses Maxpread Technologies of using AI-generated fake CEO to scam investors

Maxpread Technologies allegedly used an AI-generated avatar to pose as its CEO in a YouTube video to deceive investors. The California DFPI issued cease and desist letters to Maxpread and four other companies for offering unqualified securities and making false promises. The regulator claims the companies promised high daily returns using AI trading, but these claims were false. Maxpread did not respond to requests for comment.

Company involved

Maxpread Technologies

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Amazon expands palm-scanning payments to all Whole Foods stores amid privacy concerns

Amazon is expanding its Amazon One palm-scanning payment system to all Whole Foods stores by the end of 2023. The biometric technology, which creates a unique palm signature from vein patterns, is used for payments and identification. Privacy advocates and lawmakers have raised concerns about surveillance, data sharing, and security risks. Amazon faces a class action lawsuit under New York City's biometric privacy law for allegedly failing to provide adequate notice.

Company involved

Amazon

AI system involved

Amazon One

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FTC settles with IntelliVision over deceptive facial recognition claims

The Federal Trade Commission (FTC) took action against IntelliVision Technologies Corp. for making false, misleading, or unsubstantiated claims about its AI-powered facial recognition software. The company allegedly claimed its software had one of the highest accuracy rates on the market and was free of gender or racial bias, without supporting evidence. The FTC also alleged that IntelliVision did not train its software on millions of faces as claimed, but on images of approximately 100,000 individuals. Under a proposed consent order, IntelliVision is prohibited from making such misrepresentations without competent and reliable testing.

Company involved

IntelliVision Technologies Corp.

AI system involved

IntelliVision facial recognition software

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ScaleFactor reportedly failed to deliver promised automated bookkeeping software

ScaleFactor, an Austin-based startup, is reported to have failed to deliver the automated, real-time bookkeeping tools it promised customers, instead relying on human bookkeepers and a Filipino contract accounting firm. The company told Forbes in June that it was shutting down, initially blaming the pandemic, but Forbes later reported that its problems predated Covid-19. Investors reportedly came to see the company as more of a services business than a software platform, and pulled funding after a pivot to a marketplace model. No legal or regulatory action is reported.

Company involved

ScaleFactor

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