As part of a deal to resolve a class action lawsuit in the US dating back to 2020, Google has said it will delete the incognito mode search data of millions of users.

What Lawsuit? 

In June 2020 in the US, three Californians named Chasom Brown, Christopher Castillo, and Monique Trujill (along with William Byatt of Florida and Jeremy Davis of Arkansas) brought a lawsuit against Google’s Incognito mode. They filed the class-action lawsuit on behalf of themselves and potentially millions of other Google users who believed their data was being collected by Google despite using Incognito mode for private browsing.

The plaintiffs accused Google of capturing data despite assurances that it would not, thereby misleading users about the privacy level provided by Incognito mode. For example, internal Google emails highlighted by the lawsuit appeared to show that users using incognito mode were actually being tracked by Google to measure web traffic and sell ads.

The original lawsuit was seeking at least $5 billion in damages from Google.

What’s Been Happening? 

Since the lawsuit was originally filed, some of the main events of note between the plaintiffs and Google have included:

– Google attempting to have the lawsuit dismissed, arguing that it never promised complete privacy or non-collection of data in Incognito mode. At the time, Google pointed to the disclaimers presented to users when opening an Incognito tab, which stated that activity might still be visible to websites, web services, and employers or schools.

– A judge then rejected Google’s request to dismiss the case. The judge emphasised that Google didn’t explicitly inform users that it would collect data in the manner alleged by the plaintiffs. This decision meant that the lawsuit could again move forward.

– Finally, back in December last year, with the scheduled trial due to begin in February 2024, the lawyers for Google and the plaintiffs announced that a preliminary settlement had been reached, i.e. Google had agreed to settle the class-action lawsuit. In doing so, Google acknowledged that it needed to address the plaintiffs’ concerns (but without admitting wrongdoing).

– In January, however, following the preliminary settlement announcement, Google updated its disclosures, clarifying that it still tracked user data even when users opted to search privately or used its “Incognito” setting.

– Google also said it was trialling a new feature that could automatically block third-party cookies (to prevent user activity being tracked) for all Google Chrome users and had made the block automatic for Incognito just after the lawsuit was filed. It’s also understood that as part of the settlement deal, this automatic block feature will stay in place for 5 years.

Mass Deletions 

Under the terms of the final settlement, the full details of which are not publicly known, Google has agreed to delete hundreds of billions of the private browsing data records that it collected (with incognito).

Google Says…

A Google spokesperson has been quoted as saying that the company was pleased to settle the lawsuit which it “always believed was meritless” and that it is “happy to delete old technical data that was never associated with an individual and was never used for any form of personalisation”. 

What Does This Mean For Your Business? 

This agreement came after extensive legal battles and discussions, which in themselves highlight the complexities surrounding user privacy and data collection practices in the digital age. Part of the complexity in the case appeared to be trying to decide whether, as the plaintiffs’ lawyers argued, Google was misleading users and violating privacy and wiretapping laws or, as Google’s lawyers said, Incognito mode was designed to allow users to browse without saving activity to their local device but not to entirely prevent Google or other services from tracking user activities online.

Google has consistently denied wrongdoing and maintained its stance. However, Google (and its parent company Alphabet) are already facing two other potentially painful monopoly cases brought by the US federal government and had to pay £318m in 2022 in settlement of claims brought by US states over it allegedly tracking the location of users who’d had opted out of location services on their devices. It’s not surprising, therefore, that Google has opted to settle in this most recently concluded case although, in addition to having to delete hundreds of billions of browsing records, there are no public details yet of what else it’s cost.

The settlement, therefore, will be seen by many as a victory in terms of forcing dominant technology companies to be more honest in their representations to users about how they collect and employ user data. For big tech companies such as Google, privacy and tracking have become a difficult area. Google had already moved to free itself from other volatile privacy matters around browsing by announcing back in 2020 that it would be looking to eliminate third-party cookies within two years anyway (which has been delayed) and cookies have been subject to greater regulation in recent years.

This latest settlement is bad news for Google (and advertisers) however it is likely to be good news for the many millions of Google Chrome users whose interests were represented in the class-action lawsuit.

With Google Maps now one of the most popular mapping services globally, used by millions of people every day, plus having new features regularly being added, here we look at a dozen top Google Maps (Android) tricks to help you on your way.

Driving 

Since Google Maps can be extremely useful in the car, the first few tricks are for driving.

1. Set Departure or Arrival Times 

What it is: With this feature, you can plan a route based on your desired departure or arrival time.

Benefits: This is a great way to help with your scheduling by estimating travel time based on traffic predictions.

How-to: To use this feature, search for your destination and tap on “Directions.”

Choose your mode of transport. Then, tap on the three dots next to the “Your location” field.

Select “Set depart or arrive time” to choose your desired time, and see the estimated duration.

2. Smarter Driving with Google Assistant 

What it is: This is a helpful driving mode with messaging assistance.

Benefits: It reads messages aloud and provides you with driving notifications.

How-to: In “Navigation settings” enable “Google Assistant settings” and “Get messaging help while driving.” Adjust the message alert settings and activate “Driving notifications.”

3. Choosing The Fastest Routes Over Fuel-Efficient Ones 

What it is: If time is really of the essence, Google Maps allows you to opt for the fastest route instead of the (default) fuel-efficient one.

Benefits: Saves time / gets you there fast.

How-to: Disable “Prefer fuel-efficient routes” in “Navigation settings” > “Route options.”

4. Smarter Searching Along The Route 

What it is: If you need to plan some stops along the way, this feature helps you to search for the kind of places you’re interested in along your current route.

Benefits: Finds your stops without the need for detouring.

How-to: From the directions screen, tap the three-dot menu > “Search along route.”

Next, type in the kind of thing you’re looking for along the way e.g., restaurants, petrol stations, or specific businesses.

5. Traffic Tracking 

What it is: This can be particularly helpful on UK roads because it allows you to view real-time traffic information during navigation.

Benefits: Keeps you informed about traffic conditions so, hopefully, you can avoid the jams.

How-to: During navigation, swipe up (on the time estimate panel > activate “Show traffic on map.”

Making Things Easier 

These next tricks offer ways to just save time and make things easier for yourself within Google Maps.

6. Glanceable Directions 

What it is: This offers an enhanced navigation view with detailed steps and ETA – everything you need at a glance rather than having to search within Google Maps.

Benefits: Easier navigation and a better route overview.

How-to: Open Maps, tap profile picture > “Settings” > “Navigation settings.”

Activate “Glanceable directions.”

7. Live View for Walking 

What it is: This makes it much easier to know and see more of what’s actually around you while you’re walking along, especially if it’s somewhere you haven’t been before. Live View for Walking uses augmented reality to help with walking directions.

Benefits: Easier navigation in unfamiliar areas.

How-to: Start walking directions, and tap “Live View” (near the bottom).

8. Spot Saving 

What it is: If you’ve just found a great parking spot and you’d like to remember where it was for future reference, this feature will save your parking spot (or any location).

Benefits: Easy return navigation.

How-to: Tap the blue dot > “Save parking” and add details if needed.

9. Pinned Places 

What it is: If you need to visit the same place(s), it’s much easier to have these places saved somewhere so you can quickly pull them up rather than type them in anew each time. Pinned places does just that – it pins common trips for quick access.

Benefits: Simplifies starting navigation to frequent destinations.

How-to: Pin trips from the (main Maps screen) “Go” tab (at the bottom) or from the directions screen.

Eating 

Google Maps now provides plenty of details for nearby places to eat. Here’s a helpful trick if you’re looking for your favourite type of food.

10. Better Restaurant Suggestions

What it is: This Filters restaurant searches by various criteria.

Benefits: Tailored dining options.

How-to: After selecting “Restaurants” you can tap the filter icon and apply filters to find just the kind of food you’re looking for in the area.

Sharing 

If you’re meeting up with people (or just to make things safer), it can be useful to let others know where you are. This next trick does just that.

11. Shared Places 

What it is: A way to share your real-time location.

Benefits: Lets others track your progress.

How-to: Tap the blue location dot (within the main maps screen) > “Share location” or use “Share trip progress” during navigation.

Customising 

Customising a map can be a great way to make it simpler and faster for you to see what you need to see. This final trick helps with just that.

12. Customise Your Map with Labels 

What it is: You can add your own personal labels to locations for easier identification.

Benefits: This simplifies finding frequently visited places or marking spots of interest with custom names.

How-to: Search for a location or long-press on the map to select a place. Next, tap on the location’s name or address at the bottom, then choose “Label.” Enter your custom label name and save. The label will appear on your map for future reference.

What Does This Mean For Your Business? 

With other popular mapping tools available, Google has tried very hard in recent times to add a variety of extra useful features to Google Maps in order to compete and to retain and engage its users. However, although many of us use Google Maps, we’re unlikely to have the time or the inclination to read-up on the growing number of features and may only use Google Maps as and when, perhaps sticking to the same basic features each time. The hope is, therefore, that this collection of tricks may provide you with some useful tools and inspiration to get more value from Google Maps, perhaps saving you some valuable time and enhancing aspects of the journey on your next business or leisure trip.

OpenAI has announced the preview of its (two years in the making) ‘Voice Engine’ voice cloning tool, although there’s no firm release date yet.

What Can It Do? 

OpenAI says Voice Engine uses “text input and a single 15-second audio sample to generate natural-sounding speech that closely resembles the original speaker.”  OpenAI says this “small model” with a single 15-second sample can create “emotive and realistic voices.” 

Two Years On 

Voice Engine was first developed almost 2 years ago in late 2022, since then it’s been used to power the preset voices available in the text-to-speech API and ChatGPT Voice and Read Aloud. ChatGPT Voice is the feature that enables ChatGPT to use voice commands and AI to speak its responses. OpenAI’s text-to-speech (TTS) API is the service that converts text into natural-sounding speech, i.e. it uses AI models to produce speech that closely mimics human voices.

Being Cautious 

Although the voice cloning tool has been powering other aspects of OpenAI’s voice command and text-to-speech features for almost two years, the announcement of Voice Engine itself has been delivered with more than a hint of caution about it. For example, OpenAI’s announcement about Voice Engine says it’s just “preliminary insights and results from a small-scale preview.” Also, OpenAI admits it is deliberately taking a “cautious and informed approach to a broader release” which it says is because of the “potential for synthetic voice misuse” (e.g. deepfakes) and using convincing fake audio recordings for fraudulent purposes, impersonation, or spreading misinformation.

OpenAI says that it recognises that generating speech that resembles people’s voices “has serious risks, which are especially top of mind in an election year” and is “engaging with U.S. and international partners from across government, media, entertainment, education, civil society and beyond to ensure we are incorporating their feedback as we build.“ 

Also, testing partners for Voice Engine have had to agree to usage policies that prohibit the impersonation of another individual or organisation without consent or legal right. OpenAI is also asking partners to get explicit and informed consent from the original speaker and to disclose to their audience that the voices they’re hearing are AI-generated.

To enable OpenAI to monitor and enforce these policies and requirements, OpenAI says it’s implemented a set of safety measures, which include “watermarking to trace the origin of any audio generated by Voice Engine, as well as proactive monitoring of how it’s being used.“ 

What Now? 

Although OpenAI wants to announce the fact that it has developed a powerful AI voice cloning tool, it wants to temper the disappointment about not releasing it yet by highlighting a few positive uses for Voice Engine. For example, in its recent announcement about Voice Engine, OpenAI listed how it could be used to :

• Provide reading assistance to non-readers and children
• Translate content like videos and podcasts (for creators and businesses)
• Support people who are non-verbal (therapeutic applications).

OpenAI also highlights how Voice Engine could prove extremely useful for patients recovering their voice or for those people suffering from sudden or degenerative speech conditions, and for improving essential service delivery in remote settings, thereby reaching global communities.

What Does This Mean For Your Business? 

With this being a very important election year for at least 64 countries (including the US, UK and India), each of the large AI companies are very reluctant to be named as the one that allowed misuse of their AI products and/or didn’t take the right precautions to prevent misuse. For example, just as Google has put restrictions on what its Gemini AI model will answer about elections for fear of it being misused, OpenAI has decided now is not the right time, without the right protections in place, to release its two years in the making voice cloning tool.

OpenAI, therefore, is happy to let the world and OpenAI’s competitors know that it has an advanced AI ‘Voice Engine’ in the pipeline, but it isn’t prepared to take the risk of the tool and the company’s name being tarnished by misuse within the global arena of elections. It’s likely that we’ll see much more of this caution being exercised by AI companies releasing new features and products, particularly this year.

For businesses and organisations, plus those in the health/therapy sectors hoping to make use of the powerful, value-adding capabilities of Voice Engine, it’s a case of waiting a bit longer. The danger, however, in the fast-moving field of AI is that while time passes (as testing and safety policies are being put in place), another competitor with a new or updated existing powerful voice cloning tool may be released during the meantime, thereby stealing some of Voice Engine’s thunder.

Even when Voice Engine is regarded to be safe to release, this won’t guarantee attempts by bad actors to misuse it, so it will be interesting to see whether it’s as well protected as OpenAI says it will be and what users are able to produce with it. Ultimately, OpenAI will want to get this tool out there, being used by as many people as possible as soon as possible – pending this period of caution.

Amazon’s (Luxembourg-based) Polish e-commerce site, Amazon.pl (Amazon EU SARL) has been fined by Poland’s competition and consumer protection watchdog following customer complaints that their orders were being mysteriously cancelled.

Massive Fine 

Following an investigation about the complaints, the President of Poland’s UOKiK consumer protection watchdog found Amazon EU SARL guilty of infringement of collective consumer interests and imposed a fine of more than 31 million zlotys / £6,342,000.

What Happened? 

In short, the Polish watchdog found that customers shopping on Amazon’s Polish website had clicked on the “Buy Now” and “Proceed to Checkout” options (paying for products such as popular e-book readers), assuming that this constituted a sale, and then waited for delivery. However, the delivery didn’t happen due to Amazon repeatedly cancelling the orders because it allegedly thought the sales contract and delivery obligations to the customer were only active after an item has been shipped, rather than when the customer purchases it.

The complaints from disappointed customers who had been waiting for cancelled orders then led to the investigation, ultimately resulting in Amazon within Poland being fined.

Reasons 

The President of Poland’s Office of Competition and Consumer Protection (UOKiK) imposed the 31 million zloty fine on Amazon EU SARL for reasons related to infringing collective consumer interests, which were:

– Misleading sales and delivery practices. Amazon’s Polish website was deemed to have misled consumers about the timing of sales contract conclusions, product availability, delivery times, and consumer rights. For example, with regards to Amazon offering “Guaranteed Delivery” (i.e. the product should reach the consumer within a certain period of time), if this doesn’t happen, the consumer can request a refund of the delivery fee. However, it was found in the case of Amazon Poland that consumers didn’t receive information about the rules of this service before placing an order – the information was only made available at the order summary stage (if the consumer had decided to go through several steps defining the delivery details). This meant that if they hadn’t, they wouldn’t have been aware of their rights and may not have requested a refund or received it (when shipping was delayed). Also, information about the “Guaranteed Delivery” was found not to have been included within the order confirmations customers received.

– “Dark pattern” design tricks. This refers to Amazon being judged to have used deceptive design elements that could inject a false sense of urgency into the purchasing process, misleading shoppers about elements like product availability and delivery dates. As outlined by UOKiK’s  President, Tomasz Chróstny,  “Information about the availability of a product and its fast shipping is very valuable for consumers and for many people it can be the main reason why they make a purchase decision. However, such information must not be a decoy. If a trader gives a specific delivery date, they must meet it. This practice by Amazon is categorised as ‘dark patterns,’ as it uses pressure to make the consumer order the product as soon as possible.” 

– Cancellation of customers’ orders after payment. The practice of Amazon treating orders as non-binding until the shipment/delivery was confirmed, allowing the company to cancel them even after consumers had paid was found to be misleading as consumers believed they were concluding a sales contract upon payment.

– A lack of clarity in communication. Information crucial to understanding Amazon’s sales contract and delivery guarantee terms were found not to have been made easily accessible to consumers, and to (often) have been presented in a way that was hard to find or read (such as using a grey font on a white background, at the bottom of the page).

– The use of deceptive countdown clocks. Amazon also faces criticism in this case for having displayed countdown timers and stock availability claims that suggested imminent deadlines for order placement or implied limited product availability, without guaranteeing timely delivery.

Amazon’s practices in this case were therefore deemed to potentially mislead customers as regards the nature of their transactions on the platform, affecting their consumer rights and trust.

What Does Amazon Say? 

In its defence, Amazon Poland highlighted how it prioritises fast and reliable delivery across a wide selection of products and that Amazon.pl offers millions of items with fast and free Prime delivery. Amazon also emphasised its continuous investment and effort to provide customers with a clear and reliable delivery promise at checkout. However, it acknowledged that while most of their deliveries arrive on time, they are committed to rectifying situations promptly whenever delays or order cancellations occur.

Amazon also mentioned its collaboration with the UOKiK, proposing multiple voluntary amendments to further improve the customer experience on Amazon.pl, but stated that it strongly disagreed with the UOKiK’s assessment and penalty. Amazon also says it intends to appeal the decision.

What Does This Mean For Your Business? 

This story illustrates how any practices that could mislead customers regarding the nature of their online transactions (thereby affecting their consumer rights and trust) can lead to some painful consequences for retailers.

Although Amazon doesn’t agree with the decision and plans to appeal, the accusation and details of “dark patterns” outlined by the UOKiK in this case could be potentially quite damaging for Amazon’s reputation and could lead to them being scrutinised even more closely in the future.

While being potentially beneficial for Amazon in terms of operational flexibility, sales, and competitive positioning, the practices outlined by the UOKiK clearly backfired in a spectacularly expensive way for Amazon with a £6,342,000 fine which may be powerful enough to make Amazon more careful in future.

This case also underscores the critical importance of transparency and honesty in online retail operations. Businesses, large and small, must recognise that the digital consumer experience is not just a pathway to transactions but can have an effect on brand reputation and customer loyalty. The regulatory action taken against Amazon by Poland’s UOKiK should, therefore, serve as a potent reminder that misleading practices (intentional or not) can have severe legal and financial repercussions. It highlights the necessity for all e-commerce entities to meticulously review and possibly revamp their online sales practices, ensuring they are not only legally compliant but also aligned with ethical standards that prioritise consumer rights and transparency.

It’s been reported that some iPhone users have recently been targeted with an MFA bombing / multi-factor fatigue phishing attack.

The attack (which uses a bug in Apple’s password reset feature) bombards the user’s phone with password reset requests and ‘Allow’ or ‘Disallow’ options. If the user eventually clicks on ‘Allow’ in an attempt to stop the many prompts, they receive a call from scammers pretending to be Apple Support, asking the user to verify a one-time code in an attempt to gain access to the account and/or to sensitive user information.

So far, it’s understood that these attacks have been highly targeted at certain individuals and users should note that Apple Support will never call a user unless that user has specifically asked them to. It’s also been reported that turning on Apple Recovery Key for the account is a way to stop the multiple notifications generated by the scammers.

A recent analysis by Google’s Threat Analysis Group (TAG) and Google Cloud’s Mandiant has suggested that government-backed threat actors are more likely to be behind most exploitations of zero-day vulnerabilities than money-motivated cyber criminals.

In the report outlining the findings of the analysis, of the 58 zero-days in 2023 that could be attributed to the threat actor’s motivations, 48 of them were found to be attributable to government-backed advanced persistent threat (APT) groups conducting espionage activities. Only 10 were attributed to financially motivated cyber criminals, e.g. ransomware gangs.

The report singled out the People’s Republic of China (PRC) as the state leading the way for government-backed exploitation.

In a speech shared on LinkedIn, National Grid Chief Executive, John Pettigrew, highlighted how demand for electricity from commercial data centres will increase six-fold, within just ten years.

Double The Demand On The Grid By 2050 

Comparing today’s problem of grid network constraint to that of the 1950s, Mr Pettigrew identified the key challenges of demand on the grid growing dramatically, and forecast to double by 2050 as heat, transport and industry continue to electrify.

Why The Dramatic Increase In Data Centre Power Demand? 

Mr Pettigrew put the dramatic predicted six-fold commercial data centre power demand down to factors like the future growth in foundational technologies like AI and quantum computing requiring larger scale, energy-intensive computing infrastructure.

Innovative Thinking Required 

Mr Pettigrew also highlighted how the UK’s high voltage ‘supergrid’ of overhead pylons and cables that powered the UK’s industries and economy over decades is now 70 years old. As such, faced with the challenge of needing to “create a transmission network for tomorrow’s future” Mr Pettigrew suggested that we are at a “pivotal moment” that “requires innovative thinking and bold actions.”

Possible Solutions 

One possible solution, highlighted in Mr Pettigrew’s speech, for creating a grid that can meet future demands is the construction of an ultra-high voltage onshore transmission network of up to 800 thousand volts. It’s thought that this could be “superimposed on the existing supergrid” to create a “super-supergrid” which could enable bulk power transfers around the country. One key advantage of this approach could be using strategically located ultra-high capacity substations which can support the connection of large energy sources to big demand centres, including data centres, via the new network.

Power-Hungry 

It has long been known that data centres are power-hungry and require enormous amounts of water (for cooling), as well as needing to find sustainable solutions for using the excess heat productively. Factors such as the growth in cloud computing and the IoT, as well as the huge power demands of AI, have been identified as key factors driving the growing need for energy by data centres. Recent ideas for how to provide cooling for data centres have included immersion cooling / submerging servers in liquid and even having them submerged under the sea as underwater data centres. Ideas for producing enough power have included building dedicated small nuclear power stations / Small Modular Reactors (SMRs) adjoining each data centre. Ideas for how to best use the excess heat include heating nearby homes and businesses and even growing algae which can then be used to power other data centres and create bioproducts.

What Does This Mean For Your Organisation? 

The growth in cloud computing, the IoT, and now AI, have all meant an increase in the demand for more power. All of this comes at a time when there is a need to decarbonise and move towards greener and more sustainable energy sources. This rapidly increasing demand, coupled with the constraints of an ageing, creaking grid (as highlighted in the recent speech by John Pettigrew), means that there is now an urgent need for innovative ideas and the action to match if the UK’s businesses are to be served with the power they need to fuel the tech-driven future.

The ideas, however, must be ones that not only meet the demand for power from UK businesses and data centres, but do so in a sustainable way that meets decarbonising targets. As highlighted by Mr Pettigrew, creating a “super-supergrid” is an idea currently on the table, but a boost in wind, wave, solar, nuclear, and other power sources, as well as more carbon offsetting by data centre owners, and many other cooling and excess data centre heat distribution ideas will likely all contribute to these targets in the coming years. Also, although running AI models is a major power drain, ironically, AI may also help to provide solutions for how to manage the country’s energy requirements more efficiently and efficiently.

Trying to find and insert particular symbols or special characters into something like a Word document can often be awkward and time-consuming, but Windows provides a quick-access character map for these symbols and characters to streamline this process. Here’s how to find it and use it:

> Search for Character Map in the Start menu and open it.

> Browse or search for the symbol or character you need.

> Select the character, click Copy, then paste it into your document or application.

The US investment regulator, the Securities and Exchange Commission (SEC), has dished out penalties totalling $400,000 to two investment companies who made misleading claims about how they used AI, a practice dubbed ‘AI Washing’.

What Is AI Washing? 

The term ‘AI washing’ (as used by the investment regulator in this case) refers to the practice of making unsubstantiated or misleading claims about the intelligence or capabilities of a technology product, system, or service in order to give it the appearance of being more advanced (or artificially intelligent) than it actually is.

For example, this can involve overstating the role of AI in products or exaggerating the sophistication of the technology, with the goal often being to attract attention, investment, or market-share by capitalising on the hype and interest surrounding AI technologies.

What Happened? 

In this case, two investment advice companies, Delphia (USA) Inc. and Global Predictions Inc., were judged by the SEC to have made false and misleading statements about their purported use of artificial intelligence (AI).

Delphia 

For example, in the case of Toronto-based Delphia (USA) Inc, the SEC said that from 2019 to 2023, the firm made “false and misleading statements in its SEC filings, in a press release, and on its website regarding its purported use of AI and machine learning that incorporated client data in its investment process”. Delphia claimed that it “put[s] collective data to work to make our artificial intelligence smarter so it can predict which companies and trends are about to make it big and invest in them before everyone else.”  Following the SEC’s investigation, the SEC concluded that Delphia’s statements were false and misleading because it didn’t have the AI and machine learning capabilities that it claimed. Delphia was also charged by the SEC with violating the Marketing Rule, which (among other things) prohibits a registered investment adviser from disseminating any advertisement that includes any untrue statement of material fact.

Delphia neither confirmed nor denied the SEC’s charges but agreed to pay a substantial civil penalty of $225,000.

Global Predictions

In the case of San Franciso-based Global Predictions, the SEC says it made false and misleading claims in 2023 on its website and on social media about its purported use of AI. An example cited by the SEC is that Global Predictions falsely claimed to be the “first regulated AI financial advisor” and misrepresented that its platform provided “expert AI-driven forecasts.” Like Delphia, Global Predictions was also found to have violated the Marketing Rule, falsely claiming that it offered tax-loss harvesting services and included an impermissible liability hedge clause in its advisory contract, among other securities law violations.

Following the SEC’s judgement, Global Predictions also neither confirmed nor denied it and agreed to pay a civil penalty of $175,000.

Investor Alert Issued

The cases of the two investment firms prompted the SEC’s Office of Investor Education and Advocacy to issue a joint ‘Investor Alert’ with the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA) about artificial intelligence and investment fraud.

In the alert, the regulators highlighted the need to “make investors aware of the increase of investment frauds involving the purported use of artificial intelligence (AI) and other emerging technologies.”   

The alert flagged up how “scammers are running investment schemes that seek to leverage the popularity of AI. Be wary of claims — even from registered firms and professionals — that AI can guarantee amazing investment returns” using “unrealistic claims like, ‘Our proprietary AI trading system can’t lose!’ or ‘Use AI to Pick Guaranteed Stock Winners!” 

Beware ‘Pump-and-Dump’ Schemes 

In the alert, the regulators also warned about how “bad actors might use catchy AI-related buzzwords and make claims that their companies or business strategies guarantee huge gains” and how claims about a public company’s products and services relating to AI also might be part of a pump-and-dump scheme. This is a scheme where scammers falsely present an exaggerated view of a company’s stock through misleading positive information online, causing its price to rise as investors rush to buy. The scammers then sell their shares at this inflated price. Once they’ve made their profit and stop promoting the stock, its price crashes, leaving other investors with significant losses.

AI Deepfake Warning 

The regulators also warned of how AI-enabled technology is being used to scam investors using “deepfake” video and audio. Examples of this highlighted by the regulators include:

– Using audio to try to lure older investors into thinking a grandchild is in financial distress and in need of money.

– Scammers using deepfake videos to imitate the CEO of a company announcing false news in an attempt to manipulate the price of a stock.

– Scammers using AI technology to produce realistic-looking websites or marketing materials to promote fake investments or fraudulent schemes.

– Bad actors even impersonating SEC staff and other government officials.

The regulators also highlight high scammers now often use celebrity endorsements (as they have in the UK using Martin Lewis’s name and image without consent). The SEC in the US says making an investment decision just because someone famous says a product or service is a good investment is never a good idea.

Don’t Just Rely On AI-Generated Information For Investments 

In the alert, the US regulators also warn against relying solely on AI-generated information in making investment decisions, e.g. to predict changes in the stock market’s direction or the price of a security. They highlight how AI-generated information might rely on data that is inaccurate, incomplete, or misleading, or how it could be based on false or outdated information about financial, political, or other news events. Also, it could draw from false or misleading information.

Advice 

The alert offers plenty of advice on how to avoid falling victim to AI-based financial and investment scams with the overriding message being that “Investment claims that sound too good to be true usually are.” The regulators stress the importance of checking credentials and claims, working with registered professionals, and making use of the regulators.

What Does This Mean For Your Business? 

Just as a lack of knowledge about cryptocurrencies has been exploited by fraudsters in Bitcoin scams, regulators are now keen to highlight how a lack of knowledge about AI and its capabilities are now being exploited by bad actors in a similar way.

AI may have many obvious benefits, but the message here, as highlighted by the much-publicised substantial fines given to the two investment companies and the alert issued by regulators to beware ‘too good to be true’ AI claims. The regulators have highlighted how AI is now being exploited for bad purposes in a number of different ways. These include deepfakes and pump-and-dump schemes, via different channels, all of which are designed to exploit the emotions and aspirations of investors, and to build trust to the point where they suspend any critical analysis of what they’re seeing and reading and react impulsively.

With generative AI (e.g. AI images, videos, and AI audio cloning) now becoming so much more realistic and advanced to the point where governments in a key election year are issuing warnings and AI models are being limited on what they can respond to (refer Gemini with election questions), the warning signs are there for financial investors. This story also serves as an example to companies to be very careful about how they represent their usage of AI, what message this gives to customers, and whether claims can be substantiated. It’s likely that we’ll see much more ‘AI washing’ in the near future