This chapter discusses virtual influencers in digital marketing and their impact on consumer behavior and societal standards, along with ethical, psychological, and sociocultural challenges. Here, deceptive practices are discussed, including ones about obscuring the boundary between reality and fiction: consumers being perhaps unknowingly manipulated on account of a lack of clear disclosure. The chapter presents a comparison between VIs and human influencers with respect to engagement, emotional connection, and authenticity, and discusses how they reinforce or challenge gender stereotypes and cultural norms. It assesses the effects of different influencer sizes from macro- to micro-virtual ones in consumer behavior. On the ethical front arise concerns such as AI manipulation, authenticity, and perception of consumer trust combined with psychological ramifications surrounding VIs, including social comparison and isolation. The chapter emphasizes important points on the necessity for transparency, regulation, and ethical practice in the use of VIs for the responsible purpose of consumer protection and societal well-being today.