Cybersecurity & AI
Cyber-security: Keeping your Financial Data Safe with the Rise of AI
In 2024, Americans lost $5.7 billion to investment scams. As technology continues to advance, cyber-criminals are evolving just as fast, developing new ways to separate people from their assets. While the most common tactics used to compromise a victim's security remain malware and phishing, the latest variations of these tactics are more effective, complex, and difficult to spot. The consequences of failing to identify and mitigate these threats are significant.
Keeping your information secure from criminals is a top priority for Avondale. To better protect you and your accounts from cyber-security threats, we continuously review security procedures to ensure that we follow the best practices recommended by the custodians, financial institutions, and industry experts with whom we work. While we feel we are taking clear and actionable steps in our own firm's security measures, cyber fraud is continuing to escalate, and is becoming more sophisticated. We are encouraging our clients to embrace a series of measures to help protect their identity and mitigate potential security risks.
AI Scams Skyrocketing in 2025
With AI on the rise in the past couple of years, there is much more to watch out for on the cybersecurity front. By 2027, AI is forecasted to be responsible for $40 billion in losses, according to the Deloitte Center for Financial Services. How exactly do scammers use AI?
Phishing - phishing text messages and emails are becoming more convincing as scammers can now use AI to help them generate more realistic messages.
AI Images - scammers use images to draw you in; the easiest way to do so is to have AI generate captivating social media ads, fake identification documents, and realistic looking websites.
Deepfake Videos - What exactly is a deepfake video? It is a video or image that is artificially generated by machine learning (otherwise known as "deep learning"). These videos or images can promote fake investments, services, or products. This can be very deceiving because scammers can do real-time body or face imaging that would convince the victim that the scammer is someone they know like a family member or friend.
Cloned or Fake Voices - AI can also generate voices that mimic those of friends, family, or even create a voice that mimics a certain accent or personality.
Examples of AI Scams
It is important to learn from the mistakes of others who have fallen victim to AI scams. Here are a few recent stories in the news.
Deepfake Scam Targets Arup Engineering Firm, Losing $25 Million
Arup, a British engineering group, was manipulated by a deepfake of the group's CFO, who seemingly requested transfers from an employee to bank accounts in Hong Kong. The Arup staff member received a message about a "confidential transaction," which led to the staff member joining a video conference with AI-generated employees and the fake CFO. This manipulative scam ultimately led to the firm losing $25 million dollars.
Deepfake Elon Musk - The Biggest Scam Icon
Elon Musk has become one of the most used prominent figures for AI deepfake video scams, with more than 2,000 deepfakes generated with Elon Musk communicating an "important" message. In 2023, 82-year-old Steve Beauchamp lost his entire retirement savings of $690,000 after watching an AI-generated video of Elon Musk endorsing an investment opportunity with rapid returns. In a similar situation, a Texas resident lost $36,000 of bitcoin after falling for another video scam he saw that included the AI-generated image of Mr. Musk.
Beware of Online Searches and Imposter Websites
A Colorado couple who retired from the fire department and police force were defrauded when they invested $345,000 into fixed-interest bonds with a yield of 2.12% that they believed were being offered by "Vanguard". After a relative recommended Vanguard, they googled Vanguard and came upon a website that impersonated Vanguard's official site. They found an email from the fake website, requested more information, and in return, they received a brochure detailing the fixed-interest bonds that they were interested in. They were even assigned an asset manager and given a login for their online portals. They discovered they were swindled when their most recent payment did not show up on their investor portal.
Ways to detect AI Scams
When it comes to scams, AI mimics reality in a very subtle and convincing way. However, if you are cautious and observant, there are ways to detect when you might be looking at AI-generated fraud.
For voice-related AI scams
Never provide personal or private information that the caller is requesting you to give over the phone.
Ask questions. The scammer will not know how a loved one would answer questions that are personal and not public knowledge, so test the person over the phone to see if they can answer like your loved one would. If they cannot, it is likely a scam.
Call the trusted number of the friend or family member to verify their identity. If they pick up, you can ask them if it was them that called on the other phone number.
Take your time and be cautious. One way that scammers trick people is by hustling them and making them think there is something urgent happening. This is meant to direct your attention from any details that might give away their scam.
For visual or deepfake images
If a video seems altered in any way (for example, if a person in a video is making slightly unrealistic movements or the person is not blinking), it is likely a scam.
Listen for any inconsistencies you might hear in how a person speaks. If you have not heard a friend or family member use the lingo that they are using over the phone or in a video, it could be AI-generated.
For fake websites
Examine the URL of the website; if the domain is misspelled or the extension of the domain is not normal (standard domains include .gov, .edu, .com, .org), then the website might be fake.
Check for a site seal. This certifies that the website has undergone verification. Digicert is one example of a common certificate authority.
Check the security information of the website - the padlock icon on the browser URL indicates that the site is using Hypertext Transfer Protocol Secure (HTTPS) which means that the site is using a secure connection.
How Avondale Protects Your Information
Scammers take advantage of compromised systems to gather information for their AI-generated schemes. Our firm takes great measures to protect your information. These are some of our firms practices to ensure your data is safe:
Our firm always asks for verbal confirmations from the phone number on file for our clients before executing any money movement. This is to prevent email scams or fraudulent phone calls that mimic clients or CPAs of clients that request information.
We encourage every client to add multi-factor authentication for all online account access, including Fidelity, our primary custodian. Visit the Fidelity Security Overview page for more information at https://www.fidelity.com/security/extra-security-login. Here are some security measures Fidelity recommends to protect your data.
Make sure your contact information is correct and confirm or update your email and mobile phone number in your Fidelity Profile so that Fidelity can reach you and send notifications and alerts for important transactions.
The Fidelity Investments app on your mobile device allows you to verify and approve a login attempt with the use of the biometrics to recognize your face or fingerprint.
Authenticator apps add a layer of security to online accounts by adding a verification step beyond username and password. Fidelity supports most authentication apps, so you can download the app that works best for you. Once enrolled, you you will be prompted to enter the time-sensitive code from your authenticator app after you enter your username and password when logging into Fidelity. Another option is to have Fidelity send a 6-digit security code directly to your phone via text or voice call. The code is a one-time system generated code that you receive and will need to enter to verify your identity at login.
To add an additional layer of security to your Fidelity.com login process, visit your Security Center settings, turn on your preferred multi-factor authentication method, and turn on Security text alerts to your mobile phone number.
Industry regulations require Avondale to store, safeguard, and protect your personal and account information. We utilize secure systems and portals to store client information. All platforms require passwords to access and are designed with multiple layers of protection, including secure data transfer, encryption, network configuration, and application-level controls distributed across a secure infrastructure.
Avondale computers utilize Windows 11 Pro and are encrypted with Windows BitLocker encryption. BitLocker is a data protection feature that encrypts the hard drives on computers to provide enhanced protection against data theft on computers and removable drives that are lost or stolen.
All Avondale computers are protected with software to combat viruses, malware, and ransomware. Avondale retains an IT service provider to maintain, monitor, and service our entire information technology infrastructure. Service includes EDR (Endpoint Detection and Response) software that provides paramount protection against an array of threats, exploits, and vulnerabilities, as well as managed antivirus/malware software that ensures optimal safeguarding against viruses, malware, spyware, trojans, and additional threats.
Avondale employees are required to reset their system passwords quarterly, with complex passwords.
Avondale maintains a firm Cybersecurity Policy that outlines our approach to protecting clients, as well as protocols to implement in the event of a data breach. We also educate our employees on how to identify and avoid scams, threats, and security risks.
Please do not hesitate to contact us with questions or concerns about how we protect your accounts or the steps you and your family can take to better protect yourselves and mitigate risk. We ask that you notify us of any address change and/or if you suspect that your email or Fidelity account has been compromised. As always, we appreciate the opportunity to help you achieve your financial goals.
As always, please continue to review your Fidelity statements and Black Diamond performance reports, and let your Avondale advisor know if you have any questions or wish to discuss a change in your financial situation or risk tolerance. Avondale will continue to keep you apprised of the management of your assets with a monthly newsletter, and this expanded quarterly insight. If you have any suggestions or feedback, please do not hesitate to contact us. Thank you for your continued confidence in Avondale, and God bless.
SOURCES:
1. Artificial Intelligence Scam Tips, New York City Department of Consumer and Worker Protection, 2025.
https://www.nyc.gov/site/dca/consumers/artificial-intelligence-scam-tips.page
2. Understanding Deepfakes, University of Virginia Information Security Office, 2024.
https://security.virginia.edu/deepfakes
3. AI Scam Using Deepfake Video of Elon Musk, AI Incident Database, 2024.
https://incidentdatabase.ai/cite/1008/
4. “Retired Detective Lost Life Savings in a Clone Firm Investment Scam,” The Guardian, July 15, 2021.
5. “The AI Elon Musk Scam,” The New York Times Interactive, August 14, 2024.
https://www.nytimes.com/interactive/2024/08/14/technology/elon-musk-ai-deepfake-scam.html
6. “How a Deepfake Version of Elon Musk Became Internet’s Biggest Scammer,” Business Standard, August 14, 2024.
scammer-124081402000_1.html
7. “Deepfake CFO Scams Firm Out of $25 Million,” CFO Dive, 2024.
https://www.cfodive.com/news/scammers-siphon-25m-engineering-firm-arup-deepfake-cfo-ai/716501/
8. “5 AI Scams Set to Surge in 2025 — What You Need to Know,” Forbes, December 16, 2024.
9. “The Latest Scams You Need to Be Aware Of,” Experian Blog, 2024.
https://www.experian.com/blogs/ask-experian/the-latest-scams-you-need-to-aware-of/
10. “How to Identify Fake Websites,” DigiCert Blog, 2024.
https://www.digicert.com/blog/how-to-identify-fake-websites
11. ChatGPT by OpenAI, 2025.
Used to assist in summarizing incidents, identifying trends, and generating draft content.
https://www.fidelity.com/security/overview
https://www.fidelity.com/why-fidelity/security-protection
https://www.fidelity.com/security/extra-security-login
All information herein has been prepared solely for information purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. The views expressed represent the opinion of the Firm and should not be considered tax advice. For tax advice, please consult a CPA. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It is not intended to be investment advice or a projection of future investment performance. No one can foresee the future and, it is not a projection of the potential return of any investment, nor is it a projection of future inflation rates or the state of the world or domestic economy. Returns should not be considered a guarantee. Pie charts are target weights for Models and may deviate for market movements or specific client accounts.