AI-Generated Deepfake Financial Scams: A Missing Liability Regime for Consumer Protection Frameworks

Generative artificial intelligence (GenAI) outputs, such as deepfakes, can be useful for creating realistic simulations in education, news reporting, and the arts. However, the emergence of malicious deepfake scams has raised concerns about the quality and reliability of the information provided to social media users. This article argues that a liability regime for deepfakes is currently missing from consumer protection frameworks. Regulatory interventions do not explicitly target GenAI software developers and online social media platforms. However, the implementation of appropriate risk management safeguards is necessary to prevent unlawful deepfake activities. We contend that a shared liability regime for deepfakes among the multiple actors involved could offer adequate protection for victims of online financial fraud and would effectively target the deepfake supply chain. This shared liability regime would be complemented by the UK Financial Conduct Authority’s consumer duty rule, which acts as a preventive monitoring and enforcement mechanism to avoid foreseeable harm to consumers of AI applications.