Extract from J. Randall Boyer’s article “Corporate Fraud and Institutional Liability in the Age of Deepfakes”
When discussing the litigation challenges deepfake technology poses, one typically thinks of difficulties protecting individual privacy rights, complications prosecuting anonymous actors, the lack of law regulating deepfake usage outside commercial context, and authentication and evidentiary issues. Less prevalent is a discussion of potential liability companies face for fraud perpetrated on their customers. Yet, the proliferation of deepfake fraud has hit the corporate world at a time when courts are more willing to hold companies responsible for protecting their customers from fraudsters. In addition to protecting against fraud on the company, businesses are also well advised to protect their customers as well.
The Rise of Deepfake Corporate Fraud
Deepfake deception schemes are already widespread and poised to increase. The most headline-grabbing case involved a finance employee in Hong Kong, participating in what appeared to be a routine video conference with the company’s Chief Financial Officer and several colleagues. Pursuant to instructions received on that video conference, the employee authorized fifteen separate transfers totaling nearly $25 million to five local bank accounts. However, the CFO, the colleagues, their voices, their mannerisms—were all AI-generated deepfakes.
