The number of people falling victim to love scams in 2023 increased by more than 20 percent compared to the previous year. This means that one in every ten dating profiles is fake. So people who use these platforms should be extra careful. Financial institutions (FIs) need to be able to recognize red flag indicators associated with romance fraud and implement dynamic processes that can detect and prevent suspicious transactions.

Romance fraud occurs when a criminal adopts a false online identity to gain the victim’s affection and trust. The fraudster then uses the illusion of a romantic or intimate relationship to manipulate and/or gain financial gain from the victim. Criminals who commit romance scams are experts at what they do. They can therefore appear caring and convincing. This type of scam is often found on dating and social media sites. The scammer’s goal is to establish a relationship as quickly as possible, to ingratiate themselves with the victim and gain trust. Scammers may propose marriage and make plans to meet in person, but this will never happen. The main goal will always be to ask for money.

 What are the Tactics used by romance fraudsters and how to avoid them?

Romance scammers often use the following common tactics to trick victims:

Gifts and gestures: They send gifts to exert emotional manipulation and reassurance.

Using fake identities: They create fictitious identities pretending to be professionals to build trust.

Love bombardment: They show excessive interest to quickly establish an emotional connection.

Canned speeches: They use the same script against multiple people.

Threats: They extort more money through threats, using private information that they have obtained in secret.

Multiple victims: They gain more profit by establishing the same intimacy with more than one person.

-Scammers can use the details you share on social media and dating sites.

-Check the profile of the person you meet to see if someone else’s personal information has been used.

-Take communication slowly and ask a lot of questions to get to know the person.

-Be cautious if the person seems perfect or wants to make direct contact quickly.

-Be careful if the person is trying to keep you out of your circle, asking for inappropriate photos or financial information.

-Be careful about sending money to someone you have only communicated with online and have never met in person.

What are the Examples of romance scams?

Piggybacking: It combines investment, romance scams and cryptocurrency fraud. Fraudsters create fake accounts on dating and social media sites, gain trust and convince people to invest in cryptocurrency. In the US, $9 million worth of cryptocurrency was seized through this method.

Financial Emergency Fraud: After establishing a romantic connection, the scammer fabricates a sudden financial crisis and asks for money by exploiting the victim’s emotions. The documentary “The Tinder Swindler” describes this type of scam.

Inheritance Scams: Scammers ask victims for money by claiming to have received a large inheritance. In 2022, the FTC received 2,762 reports of inheritance scams, and in one case, three people stole $750,000.

How to detect romance scams?

-Detecting unusual customer interactions using behavioral analytics.

-Ensure the accuracy of customer information by strengthening identity verification processes.

-Train employees on the signs of romantic fraud.

-Detect pre-written template messages by analyzing customer communications.

-Identify potential risks by comparing customer information against fraud databases.

-Quickly detect suspicious activity using real-time transaction monitoring systems.

-Collaborate with law enforcement agencies to share information and stay abreast of new fraud trends.

-Adopt advanced fraud detection solutions based on AI and machine learning