In 2025, Americans reported a record $15.9 billion in fraud losses to the Federal Trade Commission. The biggest category, by far, was investment scams, at $7.9 billion, and the FBI counted $7.7 billion in internet crime losses among people 60 and older (AARP’s summary of both reports).
More and more of those scams wear the same costume: artificial intelligence. A “trading bot” that “analyzes millions of market signals.” A platform where “AI trades crypto around the clock.” Returns of a few percent a week, every week.
Federal regulators saw this coming. In 2024, the Commodity Futures Trading Commission put out an advisory with a title worth remembering: AI Won’t Turn Trading Bots into Money Machines. As the advisory puts it, “AI technology can’t predict the future or sudden market changes.”
The six-step pattern
In my new book, a widower I call Gene gets a Facebook message from an old friend from work. It’s friendly, it’s warm, and after a few days it turns to an AI trading platform that has supposedly “changed his retirement.” It nearly worked. Here’s how these scams usually unfold:
- The friendly contact. A message from someone who seems to know you, often from a real friend’s hacked account, or a “wrong number” text that turns into a friendly chat. Some of these conversations go on for weeks.
- The proof. Screenshots of huge balances. A story about a niece or cousin who got rich. Sometimes a video of a famous businessperson recommending the platform. The video is fake.
- The platform. A professional-looking website or app, with charts and “AI” everywhere. The scammers built it. Nothing on it is real.
- The small win. You deposit a little, and your balance climbs fast. Sometimes they even let you withdraw a small amount, to prove it’s real. That’s the hook.
- The bigger deposit. Encouraged, you put in more. Then more.
- The wall. When you try to take your money out, there’s a “tax,” a “fee,” or a “verification charge” to pay first. You pay it. There’s another. Then the account manager stops answering.
There is no trading bot. There’s a person, or a team of people, collecting deposits.
Red flags in any investment pitch
- Guaranteed or very high returns. Anything promising a few percent a week is a scam. Two percent a week is more than 100 percent a year.
- “AI” or “algorithm” as the main selling point. Real firms use technology. They don’t sell it as a magic money machine.
- Contact you didn’t start, especially on social media or a messaging app.
- Unusual ways to pay: cryptocurrency, crypto ATMs, gift cards, wire transfers, or payment apps to people you’ve never met. Gene was sent a map to a crypto machine at a gas station. No legitimate firm does that.
- Pressure and secrecy: “Start now,” “spots are limited,” “don’t tell your bank.”
The rule that saved Gene
Gene couldn’t tell the messages were fake. Most people can’t anymore. What saved him was a rule: when anything about money feels urgent, wait 24 hours and call someone you trust, on a number you already know.
So he waited. The next day he called his friend’s home phone, from an old address book. His friend’s wife answered. Her husband’s account had been hacked months earlier, and two of his other friends had already sent money.
If you’ve already sent money
Act fast. Call your bank or the payment company right away, using the number on your card or statement. Stop all contact, and don’t pay any “fee” to unlock your account. Report it at ReportFraud.ftc.gov and the FBI’s ic3.gov. And watch for the second scam: “recovery” services that promise to get your money back for a fee are often run by the same criminals.
If it happened to you, you’re in good company, and it isn’t about being smart. These are professional teams with tested scripts. Tell someone. Every time the story is told, someone else becomes a little harder to fool.
