Victims of so-called romance scams are being conned out of tends of thousands of pounds; with one victim losing more £428,000 according to the Financial Conduct Authority (FCA). The regulator estimates such scams cost victims as much as £106m last year.
Cases have risen 9% in the last 12 months prompting the FCA to issue a warning following its latest review into the practice which sees victims deceived into sending money to fraudsters who engineer false romantic relationships or friendships.85% of victims are targeted online say the FCA, mostly through social media and dating websites, calling on such platforms to play their part in preventing fraud and reducing harm
The FCA’s review found missed opportunities to protect victims. Although there was evidence of good practice, with one firm identified as having made 11 calls over a 6-week period to support a victim, ‘demonstrating a commitment to breaking the fraudster’s hold and restoring customer confidence’, the FCA suggested firms could do more. In one case reviewed by the FCA a victim made 403 payments to a fraudster over the course of a year, resulting in losses of over £72,000. Although the FCA acknowledged victims may be ‘under the spell’ of the fraudster, in such a case an investigation found the firm had not identified the sustained, out-of-character activity.
The task is made all the more difficult by nearly half of people being untruthful in disclosing the real reason for making the payment; one victim told bank staff they intended to send cryptocurrency payments to Iraq, claiming it was the only method accepted by their ‘partner’ in the military.
Firms could calibrate their monitoring systems to be more effective said the FCA, and one key area for improvement is training staff to spot red flags and critically probe customer explanations. This was not consistent across all firms.
Steve Smart, executive director of enforcement and market oversight at the FCA, said:
“Romance fraud is a vicious crime. All too often it is the vulnerable that fall victim. The impact – financially and personally – can be devastating. We recognise the challenge banks and payment firms have in combating this complex crime and this review aims to help them stay one step ahead of the criminals.
“We also all need to be on guard so we can protect ourselves and loved ones by recognising the romance fraud red flags.”
On its website the FCA listed a series of red flags and alarm bells which should raise suspicion of romance fraud.
- Alarm bells should ring if someone you’ve only met online asks for money or suggests investments. Never send money (or crypto assets or vouchers), no matter how sad their story.
- Look beyond the online profile. If someone asks you for lots of personal information, yet is unable to meet in person, then that could be a red flag. And use image checkers to see if their pictures can be found elsewhere.
- Get a second opinion from a family member or friend if the other person’s behaviour seems suspicious and you are being asked to make financial commitments you aren’t comfortable with.
- If you think you’ve fallen victim, report it to Action Fraud or Police Scotland if you live there. Speak to your bank as you may be able to get a refund of money you’ve sent – up to £85,000 – and it can help to prevent further losses.
