Romance fraud: Five ways to ensure scammers don’t break the bank, as well as your heart

February is known as the month of romance – but lockdown rules have resulted in further isolation for singletons, leaving thousands with lonely hearts seeking love remotely.

But with this desperation comes another threat: romance fraud. It has become a very lucrative industry for fraudsters, and last year victims of this type of scam were collectively fleeced to the tune of £68.2million.

This is according to data from the National Fraud Intelligence Bureau, which also found that there were 6,748 cases of romance fraud in 2020.

By comparison, 89,000 people were scammed through online shopping in 2020 but collectively the losses amounted to £63million in total – less than what was lost to romance fraudsters.

The average loss per victim reported to UK Finance members was £7,850. This indicates that even though there are fewer people targeted by romance fraudsters, the average amounts that they are scammed out of can be high.

Similar trends have been identified by Barclays ahead of Valentine’s Day. The bank identified a 46 per cent rise in romance scams during 2020.

Ross Martin, head of digital safety at Barclays, says: ‘With most of us in lockdown throughout 2020, those looking for love have had to stick to online dating and apps.

‘This has meant that the pool for potential scam victims has risen and more people are being duped, as seen in our latest data.’

What is romance fraud?

Romance fraud occurs when people are duped into sending money to criminals who go to great lengths gain their trust, while at the same time concealing their true identity and intentions.

They are master manipulators. Carole Ann Rice, a life coach and founder of The Real Coaching Co, explains: ‘It starts with small things like ‘I’d love to go out, but I don’t have money’ or ‘could you just lend me…’.

‘They usually have some kind of reason behind [their need for money] and a track record of some success. Sadly, the victims are those that have been lonely for a while.’

Romance fraudsters are very patient. Paul Davis, retail fraud prevention director at Lloyds says: ‘Scammers do this for a living – they’re in it for the long game and will often spend a lot of time building up a ‘relationship’ and trust – they can invent convincing stories, waiting for the right moment to start tricking people into sending them money.

‘If you’ve struck up a conversation or begun a relationship solely online and the discussion moves on to sending money, that’s the time to stop.

‘It might be a little at first, but when they know they’ve got you then they will try everything to make maximum profit. 

‘Social media and technology make it so much easier for them to pretend to be someone else in their profile, so it’s more important than ever to stop and think when someone asks you to send cash from your account.’

Dating scammers can afford to be patient because as they’re starting their ‘romance’ with one person, they’re already distancing themselves from someone else as they’ve taken their money.

The pandemic has created a perfect cover for romance fraudsters. These types of criminals often claim to be out of a job or deep in debt, and these scenarios are all the more plausible given that the UK unemployment rate currently stands at around 4.9 per cent.

Peter Hazlewood, group financial crime risk director at Aviva, says: ‘Romance scammers are exploiting the pandemic and lockdown conditions by preying on people who are spending more time at home, often in isolation, and on the internet.

‘Typically, these fraudsters pretend to be someone completely different from who they are in real life. They usually begin by building trust with their victim, feigning friendship or romance. They then begin to drop subtle hints about needing money for a difficult situation.’

Who gets targeted by flirtatious fraudsters? 

According to the NFIB, it’s typically middle-aged women that are targeted. More than half (55 per cent) of the victims are female, and 41 per cent are between 40 and 49 years of age.

Hannah Hart, digital privacy expert at ProPrivacy, says: ‘It’s not uncommon for a fraudster to latch on to more vulnerable individuals: recent divorcees and widows are popular targets.

‘It is also a crime that can isolate victims – they are often reluctant to reach out to friends, family or the authorities for fear of being called gullible – or worse.

‘It’s easy to get swept up in feelings, and we often go out of our way to please the people we’re trying to impress. Sadly, romance scammers prey on these very human foibles to trick their victims.’

Men and young people can be victims, too. According to research produced by Lloyds, the lack of contact with others has caused nearly a quarter of people to let down their guard against scams during the pandemic.

The bank also highlighted that 18–24-year-olds were the most likely out of all the age groups to let their guard down and talk to strangers as a result of limited contact with others.

Do victims get their money back?

Romance fraud victims typically lose their money by willingly transferring their funds over to the fraudster. Transferring money in this way is known as an authorised push payment.

To address this growing problem of APP scams some banks, including Lloyds, Barclays, and HSBC, have signed up to the APP Code which reimburses victims of this type of fraud. But getting such losses repaid by your bank is a lottery.

The code is voluntary, and not all banks are subscribed to it. 

It’s also vague. It states that victims of APP fraud ‘should’ have their losses reimbursed, except in certain circumstances such as in the event of gross negligence or if they ignored effective warnings.

Banks usually aren’t very forthcoming about their definition of what gross negligence is, or what consists of ‘ignoring effective warnings’.

When asked, a Lloyds spokesperson offered an example: ‘If you’re setting up an account and the bank warns clearly that the bank details don’t match the name, then you may be deemed as not taking reasonable care to ensure the payment is genuine.

‘This also applies if a person is encouraging you to ignore the bank warnings, or to lie to the bank about what the payment is for.’

The losses suffered by the banking industry due to APP scams are great, which is part of the reason why banks are reluctant to explain what their refund criteria are.

But there have been some victim success stories. Davis points out that since the code came into effect in May 2019, the number of customers refunded has doubled.

He says: ‘At Lloyds, we have returned nearly £60million to victims of fraud who would otherwise have had no recourse to reimbursement. Of this £60million, over £20million was recovered from the accounts to which the funds were sent – i.e., recovered from criminals.’

But this serves little comfort to those who have already lost money and are too embarrassed to come forward, or who were rejected by their bank when they pled their case.

The good news is that artificial intelligence may soon help banks impart more information that could give victims an indication that they are the target of a romance scam.

Temur Khawaja, product manager at fraud detection company Feedzai which uses artificial intelligence to spot potential scams, says: ‘Banks might try to warn their customers that sending money to the person they’ve ‘fallen in love with’ is a risky transaction, but ultimately it is up to the person to choose whether they wish the transfer to proceed.

‘In these instances, machine learning can be useful to help banks to provide their customers the full picture: what if your bank could tell you that this person who is desperately seeking £1,500 from you has also collected the same amount from five other people that same week?’

But until that technology is fully adopted by all banks and used effectively, customers will have to rely on their own instincts.