The rise of deepfake scams in investment sector: FSCA issues public warning

As Artificial Intelligence technology advances, deepfakes - hyper-realistic digital media that can convincingly impersonate individuals - are becoming a significant concern, particularly in the investment sector.

This week, the Financial Sector Conduct Authority (FSCA) put out a warning to the public about a new investment scam that features deepfake videos of businessman Dr Patrice Motsepe and other well-known entrepreneurs.

Deepfakes are created using advanced AI techniques, such as Generative Adversarial Networks (GANs), which allow the generation of realistic audio, video, and images of individuals saying or doing things they never actually did.

According to the FSCA, two entities, Gold Earnings and Africa Gold, are fraudulently using images and videos of Motsepe and other individuals to solicit funds and promise unrealistic returns of 46% on investments of between R2,000 and R100,000.

The deepfakes depict what appears to be Motsepe promoting the “investments” offered by Gold Earnings and Africa Gold.

Motsepe, founder and executive chairman of African Rainbow Minerals (ARM), has condemned the actions of Gold Earnings and Africa Gold, confirming to FSCA that neither he nor ARM have any association or relationship with the entities and stating that they are considering civil and/or criminal action.

The FSCA urges the public to be vigilant when seeking financial services, after finding that Gold Earnings and Africa Gold are not even authorised in terms of any financial sector law to provide financial services to the public.

“To avoid unnecessary risk, the public should refrain from accepting financial advice, assistance, or investment offers from individuals or entities not authorised by the FSCA.

“Authorised financial services providers must clearly display their authorisation status in their documentation. If this is not present, it is advised to further investigate before making any payments,” said FSCA.