A look at Kioxia's expansion in Japan's Kitakami, which helped stall the city's demographic decline and is a test of Japan's $640B AI and chips investment plan (Bloomberg)

The Consumer Affairs Agency of Japan announced Tuesday that it will combat investment and other fraudulent schemes promising high returns using generative artificial intelligence. A newly established group within the agency will leverage AI to analyze cases reported to the National Consumer Affairs Center's information system, which handles around 900,000 annual reports.

By identifying similarities to past fraud cases and malicious operators, the AI system aims to enable quicker intervention and more timely warnings to consumers. This move comes as it's challenging to issue administrative orders without receiving specific complaints, such as non-payment of promised dividends. The agency plans to gather data on reported consultation cases and tactics used by malicious operators by deploying experts nationwide starting next fiscal year.

Consumer Affairs Minister Hitoshi Kikawada emphasized the importance of swift response in fraud cases, stating that recovery is difficult once damage is done.