AI incident #706 · 1 April 2024

Scammers Using AI to Impersonate Small Businesses

Open on the AI Incident Database 1 news report Snapshot 7 Sep 2026

What happened

Scammers are using AI to impersonate small businesses by copying their videos, logos, and social media posts. They create fake listings and ads, diverting customers to cheap knockoffs or stealing their money. This has severely impacted businesses like Bee Cups, Darn Tough Vermont, and Cascade hummingbird feeders, leading to significant financial losses, negative reviews, and damaged reputations. Their deployment of AI makes it challenging for small businesses to combat these fraudulent activitie

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News reports (1)

Coverage catalogued by the AI Incident Database. Titles link to the original publisher; the text is not reproduced here.

10 Jun 2024
Scammers’ New Way of Targeting Small Businesses: Impersonating Them
wsj.com · Ruth Simon · AIID #3920

Who was involved

Alleged deployer: Scammers
Alleged developer: Openai, Unknown Ai Developers
Alleged harmed party: Small Businesses, Small Business Customers, Small Business Employees, Bee Cups, Darn Tough Vermont, Jim Carter

Classification (MIT AI Risk Repository taxonomy)

Risk domain: Malicious Actors & Misuse
Risk subdomain: 4.3 Fraud, scams, and targeted manipulation
Causal entity: Human
Intent: Intentional
Timing: Post-deployment
Harm level: —
Sectors: —
Countries: —

Risk entries describing this failure mode

Entries from the MIT AI Risk Repository coded to subdomain 4.3.

Impersonation/identity theft
"Impersonation/identity theft - Theft of an individual, group or organisation’s identity by a third-party in order to defraud, mock or otherwise harm them."
A Collaborative, Human-Centred Taxonomy of AI, Algorithmic, and Automation Harms (Abercrombie2024)
IP/copyright loss
"IP/copyright loss - Misuse or abuse of an individual or organisation’s intellectual property, including copyright, trademarks, and patents."
A Collaborative, Human-Centred Taxonomy of AI, Algorithmic, and Automation Harms (Abercrombie2024)
Dehumanisation/objectification
"Dehumanisation/objectification - Use or misuse of a technology system to depict and/or treat people as not human, less than human, or as objects."
A Collaborative, Human-Centred Taxonomy of AI, Algorithmic, and Automation Harms (Abercrombie2024)
Defamation/libel/slander
"Defamation/libel/slander - Use of a technology system to create, facilitate or amplify false perception(s) about an individual, group, or organisation."
A Collaborative, Human-Centred Taxonomy of AI, Algorithmic, and Automation Harms (Abercrombie2024)
Financial and business
"Financial and Business - Use or misuse of a technology system in a manner that damages the financial interests of an individual or group, or which causes strategic, operational, legal or financial harm to a business or...
A Collaborative, Human-Centred Taxonomy of AI, Algorithmic, and Automation Harms (Abercrombie2024)
Cheating/plagiarism
"Cheating/plagiarism - Use of another person’s or group’s words or ideas without consent and/or acknowledgement."
A Collaborative, Human-Centred Taxonomy of AI, Algorithmic, and Automation Harms (Abercrombie2024)
Cybersecurity
"LLMs may exacerbate cybersecurity risks in various ways (Newman, 2024). Firstly, LLMs may significantly amplify the effectiveness of deceptive operations aimed at tricking people into disclosing sensitive information or...
Foundational Challenges in Assuring Alignment and Safety of Large Language Models (Anwar2024)
Misinformation and Manipulation
"Recent studies have demonstrated that LLMs can be exploited to craft deceptive narratives with levels of persuasiveness similar to human-generated content (Pan et al., 2023b; Spitale et al., 2023), to fabri- cate fake n...
Foundational Challenges in Assuring Alignment and Safety of Large Language Models (Anwar2024)

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