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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Martin Lewis warns of AI deepfake scam video depicting wife being beaten
Scammers created an AI-generated deepfake video of Martin Lewis's wife, BBC presenter Lara Lewington, being beaten up by an 'immigrant' to promote a fake 'Martin Lewis Quantum AI' investment scheme. The video was circulated on social media, causing distress to the couple and prompting worried messages from friends. Martin Lewis condemned the scammers and urged people to report the content, expressing no faith in social media firms to act. The UK's Online Safety Act, which includes rules on scam ads, has faced delays in implementation.
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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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FinTech and traditional lenders discriminate against minority borrowers in mortgage pricing
A study of mortgage lending from 2012-2018 found that Latinx and African-American borrowers were charged higher interest rates than white borrowers with similar credit risk. FinTech algorithms reduced the disparity by 40% but did not eliminate it. The discrimination costs minority borrowers an estimated $765 million per year in extra interest.
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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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Bankrate Publishes AI-Generated Article with Numerous Factual Errors, Deletes After Futurism Inquiry
Bankrate published an AI-generated article about the best places to live in Colorado that contained multiple factual errors, including incorrect median home prices and unemployment rates. The article was removed after Futurism pointed out the mistakes. A Bankrate spokesperson blamed the errors on outdated data from an internal database, claiming the article was editor-reviewed. The incident follows a previous scandal where CNET and Bankrate paused AI content after similar errors, but the company has resumed AI article publication.
- Company involved
- Bankrate
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West Virginia Couple Targeted in AI-Generated Real Estate Scam
Raegan Bartlo received an email on August 23, 2024, that appeared to be from her title company lawyer, instructing her to wire a $255,000 down payment for her new home. The email was part of a scam using generative AI to impersonate real estate professionals. Cybersecurity officials say such scams are occurring across the country, targeting homebuyers. The Bartlos were targets, but it is unclear if they lost any money.
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Inland Revenue warns of AI scam using commissioner's image
Scammers used AI-generated images and messaging to impersonate New Zealand's Commissioner of Inland Revenue, Peter Mersi, in social media ads inviting people to a fake crypto tax webinar. The ads aimed to trick people into giving personal information for identity theft or account access. Inland Revenue received over 3000 scam reports in three months and worked to have the ads removed, but they kept reappearing. The department warned the public about the increasing use of AI in investment scams.
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SEC warns public of deep fake investment scams featuring Lance Gokongwei
The Securities and Exchange Commission (SEC) warned the public that scammers are using deep fake videos and audio of Lance Gokongwei to endorse fraudulent investment schemes. The manipulated media circulate on social media, deceiving people into investing in a platform registered in Cyprus. Victims are asked to provide credit card details and OTPs, then lose contact when attempting to withdraw funds. The SEC advises the public to verify investment offers with the agency.
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Barclays pilot of Sapience monitoring software causes employee stress
Barclays introduced a pilot of employee monitoring software from Sapience in its product control department at Canary Wharf. The system monitors computer activity and admonishes staff if they are not deemed active enough, recording breaks as "unaccounted activity". Employees reported significant stress and worry about taking breaks. Barclays acknowledged the pilot and said it would listen to feedback.
- Company involved
- Barclays
- AI system involved
- Sapience employee monitoring software
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Google AI Overviews provide inaccurate finance information in 43% of searches
A study by The College Investor found that Google's AI Overviews provided misleading or inaccurate information in 43% of 100 personal finance-related searches. The AI-generated answers included outdated tax rules and incorrect student loan repayment plan details. One user believed she could convert her 529 plan to a Roth IRA in California, which is not allowed. Google has not responded to requests for comment.
- Company involved
- Google
- AI system involved
- AI Overviews
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Michael L. Ruiz v. Magellan Financial & Insurance Services (2) (D. Arizona): AI-hallucinated content in court filing, Formal public reprimand
AI-hallucinated fake quotations were included in court filings submitted by counsel Elizabeth Tate, misleading the court.
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Facebook Allowed Age-Targeted Credit Card Ads Violating Its Policy
The Markup found that four companies—Aspiration, Hometap, Chime, and Varo Bank—ran Facebook ads for credit cards and home equity loans that were targeted by age, excluding users under 25 or 35. This practice violates Facebook's own anti-discrimination policy and may violate the Equal Credit Opportunity Act and California's Unruh Civil Rights Act. Facebook did not respond to requests for comment, and some advertisers said they would review their ad targeting.
- Company involved
- Facebook
- AI system involved
- Facebook Ad Platform
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Aguilar v. The Crawford Group, Inc. (D. Massachusetts): AI-hallucinated content in court filing, Adverse Costs Order; Pro hac vice status…
The AI generated fake legal citations that were included in a court filing, misleading the court and opposing counsel.
- Company involved
- Lindemann Law Firm
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Study finds credit score algorithms less accurate for minorities
A study of 50 million US consumers found that credit scoring algorithms used by mortgage lenders are less accurate for minority and low-income applicants due to sparse credit data, leading to higher rejection rates. The inaccuracy is due to noise in the data, not bias, so fairer algorithms cannot fix it. The study suggests that adjusting for bias had no effect, and that addressing the inaccuracy could reduce disparities by 50%.
- Company involved
- Mortgage lenders (unnamed)
- AI system involved
- Credit scoring algorithms
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LoanDepot algorithm denied mortgage to Black couple in Charlotte
In August 2019, Crystal Marie and Eskias McDaniels, a Black couple, were denied a mortgage for a house in Charlotte, North Carolina, by loanDepot's automated underwriting algorithm. The algorithm rejected the application because Crystal Marie was a contractor, not a full-time employee, despite her high credit score and income. After the couple enlisted their real estate agent and employer to intervene, the lender reversed the decision and cleared them to close. The couple alleged that race played a role in the denial, which loanDepot denied.
- Company involved
- loanDepot
- AI system involved
- Classic FICO and Fannie Mae/Freddie Mac automated underwriting software
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JMOR Properties v. Artist Alley Townhomes et al. (CA Florida (4d)): AI-hallucinated content in court filing, Bar Referral
The AI generated fabricated legal citations that were included in a court filing, affecting the court and the opposing party.
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Southland Homes & Real Estate and Investment, LLC v. Lam (SC California): AI-hallucinated content in court filing, Monetary Sanctions; Bar…
The AI system generated legal briefs containing fabricated case citations, which were filed in court, affecting the court and the opposing party.
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Joyce Barber v. Lawrence J. Morawa, MD (CA Michigan): AI-hallucinated content in court filing, Case remanded to consider sanctions; Bar…
AI-generated fake legal citations were submitted to the court, affecting the plaintiff's appeal and the defendant's legal costs.
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City analyst Michael Hewson cloned in AI deepfake scam on social media
A deepfake video using AI to impersonate City analyst Michael Hewson circulated on Facebook and Instagram, directing users to a WhatsApp group promising undervalued investments. The scam used fear-of-missing-out tactics to lure victims. Hewson publicly disavowed the video and reported it to Meta, expressing anger.
- Company involved
- Meta
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CJEU rules Dun & Bradstreet must explain automated credit decisions under GDPR
A customer was refused a mobile phone contract because of an automated credit assessment by Dun & Bradstreet Austria. The customer took the case to court, which found that Dun & Bradstreet had infringed the GDPR by failing to provide meaningful information about the logic involved. The CJEU ruled that data controllers must explain automated decisions and that trade secrets cannot automatically override the right of access.
- Company involved
- Dun & Bradstreet Austria GmbH
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Citizens Advice finds ethnicity penalty in car insurance pricing
Citizens Advice conducted exploratory research into car insurance pricing and found that people of colour may be paying £250 more per year than White people. The research suggests that areas with large communities of colour may be identified as more risky by algorithms, even when objective risk factors are controlled. Citizens Advice has called on the Financial Conduct Authority to investigate the issue.
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AI-generated voice impersonates Liz Bonnin to deceive Incognito
Scammers used an AI-generated voice to impersonate BBC presenter Liz Bonnin, convincing Incognito CEO Howard Carter to pay £20,000 for an endorsement. Bonnin's likeness was used in insect repellant ads without her consent. The AI-generated voice note exhibited inconsistent accent and cadence, as assessed by experts. Incognito reported the incident to police and its bank.
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Pensioner loses 80,000 pounds to deepfake Martin Lewis investment scam
The deepfake video deceived a pensioner into investing in a fraudulent scheme and taking out loans.
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