Deepfake Scam Explained: How AI Is Being Used for Online Fraud

Key Takeaways

• Deepfake scams use AI-generated audio, video or images to impersonate real people.
• Fraudsters can use deepfakes for financial fraud, identity theft and social engineering.
• A realistic-looking video call or familiar voice does not guarantee that the person is genuine.
• Always verify unusual requests through a separate, trusted communication channel.
• Cyber Retail Insurance may provide financial protection against certain cyber losses, depending on the policy's coverage and exclusions.

What Is a Deepfake Scam?

A deepfake scam is a type of fraud in which criminals use artificial intelligence to create or manipulate videos, images or voice recordings to make someone appear to say or do something they never actually did.

For example, a fraudster could use publicly available videos and voice recordings of a company executive to create a fake video call. They may then instruct an employee to urgently transfer money to a particular account. Similarly, scammers may clone the voice of a family member and claim that they need money urgently.

Deepfake technology can be used to:

• Clone someone's voice
• Create realistic AI-generated videos
• Manipulate facial expressions and movements
• Generate fake images
• Impersonate trusted individuals

The problem is that modern deepfakes can be difficult to distinguish from genuine content. Many reports also highlight that deepfakes can be used to impersonate people and steal money or data.

How Do Deepfake Scams Work?

Most deepfake scams follow a relatively simple sequence:

1. Data Collection: Scammers collect publicly available photographs, videos and voice recordings of their intended target.
2. Deepfake Creation: AI tools are then used to create a fake voice, image or video that resembles the target.
3. Impersonation: The scammer pretends to be someone the victim already trusts, such as a family member, bank representative, colleague or senior executive.
4. Victim Contact: The victim may receive a phone call, WhatsApp message, video call, email or social media message.
5. Fraudulent Request: The scammer creates urgency and asks the victim to transfer money, share credentials, reveal personal information or perform another action.

This combination of AI-generated content along with the impersonation and urgency makes deepfake scams particularly dangerous.

Types of Deepfake Scams

Deepfake fraud can take several forms depending on how the fake content is used.

1. Deepfake Video Scam

Fraudsters use AI-generated video to impersonate a trusted person during a video call. For example, a scammer may pretend to be a senior executive and instruct an employee to make an urgent payment.

2. Deepfake Voice Scam

The scammer uses AI to replicate someone's voice and then makes a phone call requesting money or sensitive information. A familiar voice should therefore not automatically be treated as proof of identity.

3. Deepfake Identity Fraud

AI-generated photographs or videos can be used to create fake identities or bypass certain verification processes.

4. Deepfake Financial Scam

Fraudsters may create videos featuring celebrities, financial experts or public figures promoting fake investments, trading opportunities or other financial schemes.

5. Family or Friend Impersonation Scam

A scammer may clone the voice or appearance of a family member and claim to be facing an emergency. The objective is usually to make the victim act before they have time to verify the request.

Deepfake Scam in India: What the Numbers Say

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Deepfake scams are part of a much larger digital fraud problem in India. McAfee's 2026 State of the Scamiverse report found that:

• 82% of Indians surveyed said that they are more wary of opening messages from unknown senders than they were a year ago .
• 51% said they had lost money to a scam.
• Indians reported encountering 4 deepfakes per day on average.
• 70% said their social media account had been compromised in the previous year.
• Indians who lost money reported an average loss of ₹93,915.

What does this tell us? Deepfake fraud should not be viewed as an isolated technology problem. It is becoming another tool within the broader ecosystem of online scams, social engineering and financial fraud.

Examples of Deepfake Scams

1. Arup Engineering Firm Incident

In early 2024, an employee at global engineering company Arup was reportedly tricked into transferring approximately US$25.6 million after fraudsters used deepfake technology to impersonate the company's CFO and other executives during a video conference.

2. Hong Kong Multinational Company Fraud

In 2024, a clerk at a multinational company in Hong Kong was reportedly deceived into transferring HK$200 million after participating in a video conference where fraudsters impersonated senior executives using deepfake technology.

3. UK Energy Company Voice Scam

In 2019, a UK-based energy company CEO received a call from someone who sounded like the CEO of the company's German parent company. The caller requested an urgent transfer of €220,000 to a supplier. The voice was later identified as part of a deepfake scam.

4. Singapore Finance Director Incident

In 2025, a finance director at a multinational company in Singapore reportedly authorised a US$499,000 payment after joining a Zoom call with individuals he believed were senior executives. The meeting was allegedly created using AI-generated visuals and voices.

The above incidents demonstrate an important lesson: seeing and hearing someone is no longer sufficient proof of identity.

How to Protect Yourself From Deepfake Scams

Verify Through Another Channel

If someone asks for money or sensitive information, contact them separately using a known phone number or another trusted communication channel.

Don't Trust Urgency

Pause before acting on an unexpected request. A legitimate emergency does not necessarily mean you should skip verification.

Limit Publicly Available Content

The more photographs, videos and voice recordings publicly available about you, the more material scammers may have to work with. Review your social media privacy settings regularly.

Use Multi-Factor Authentication

Enable MFA on banking, email and other important accounts to add another layer of protection.

Avoid Sharing Sensitive Information

Never share passwords, PINs, OTPs or banking credentials merely because the person on the other end appears familiar.

What to Do If You Become a Victim of a Deepfake Scam?

If you believe you have fallen for a deepfake scam, act quickly.

1. Contact your bank immediately if money has been transferred.
2. Block cards or accounts where necessary.
3. Report the incident through India's National Cyber Crime Reporting Portal.
4. Change compromised passwords and secure affected accounts.
5. Preserve evidence, including messages, call records, screenshots, emails and transaction details.

Pro Tip: Don't delete suspicious messages or call records. They may help establish what happened during the investigation.

Can Cyber Retail Insurance Protect You From Deepfake Scams?

Deepfake scams can result in consequences such as theft of funds, identity theft, online financial fraud and other cyber-related losses. Personal Cyber Insurance available through Policybazaar is designed to protect individuals against financial losses arising from cyber threats, including identity theft and online fraud.

However, it is important to understand that not every deepfake-related loss will automatically be covered.

Coverage depends on the specific policy wording, insured event, applicable conditions, exclusions and limits.

What Can Cyber Retail Insurance Potentially Help With?

Depending on the policy, personal cyber insurance may provide protection for risks such as:

• Theft of Funds: Financial loss resulting from certain covered cyber frauds.
• Identity Theft: Costs or losses associated with misuse of personal identity.
• Online Financial Scams: Protection against specified online financial frauds.
• Cyber-Related Personal Risks: Certain policies may also cover risks such as cyberbullying or harassment.

So, if a deepfake is used as part of a covered cyber fraud, Cyber Retail Insurance may help mitigate the financial impact, subject to the terms of the chosen policy.

Important: Cyber insurance is not a replacement for verification and cybersecurity precautions. Always check whether deepfake-enabled fraud, unauthorised transactions or the specific type of financial loss is covered before purchasing a policy.

Deepfake Scam vs Traditional Online Scam

The important difference is how convincingly the scammer can imitate a trusted person.

Conclusion

Deepfake scams are changing the way online fraud works. A scammer no longer needs to rely only on a convincing message or phone call; they can potentially recreate a person's face, voice and mannerisms to make a fraudulent request appear genuine.

As AI-generated content becomes more sophisticated, the safest approach is to verify before trusting. Don't transfer money simply because a familiar face appears on a video call or a familiar voice is heard on the phone.