My Phony Valentine: Covid Fuels Romance Scams

According to Federal Trade Commission data released last week, approximately 32,800 romance scams were reported last year, nearly 31% more than in 2019. Consumers reported a record $ 304 million loss on the scam, up from nearly 51%, the FTC said.

Romantic scam artists often build fake online personas to develop relationships with victims through online dating apps or social media platforms. However, they keep their distance and make excuses for why they can’t meet in person. Sometimes it’s a fake military deployment, sometimes a made-up assignment on an offshore oil rig, said Monica Vaca, an associate director at the FTC. As a virtual relationship grows stronger, scammers make requests for money, which often disappear once the money is in their hands.

Current conditions are ripe for such fraud, Ms Vaca said. Social detachment has complicated personal dating. People spend more time online. There has been a general increase in the use of dating apps. And the pandemic has added to the perceived credibility of requests for money – for medical bills or car repairs to get to a vaccination appointment, for example.

Travel restrictions and health reasons also provide seemingly legitimate excuses for fraudsters to avoid victims. “We see people in our reports saying things like, ‘Oh, I can’t meet; I just got my Covid diagnosis, ” said Ms. Vaca. “So that becomes part of the storyline.”

Consumers should be vigilant, she said, but so should businesses bound by anti-money laundering rules to report suspicious activity. “They play a very important role in this,” said Ms. Vaca.

Preventing fishy transactions has become easier in recent years as financial institutions and money transfer companies have improved data analysis tools. As fraudsters change tactics, companies can adapt systems to new patterns, allowing for suspicious activity or dubious customers to be detected more quickly.

That’s partly how Western Union Co.

has managed to keep abreast of the changing tactics of fraudsters, said Tyler Hand, the money transfer company’s chief compliance officer. Improvements in the Denver-based company’s monitoring technology in recent years have led to a decrease in the number of romantic scams reported to the company, including in the past calendar year, he said. Some of those changes were made as part of a settlement with federal authorities, including the FTC, over alleged shortcomings among police clients who may be committing fraud.

One thing that cannot be solved by an algorithm: human gullibility in the face of possible romance. That is why Western Union and competitor MoneyGram International Inc. say customer outreach and education are also important.

MoneyGram strengthened its monitoring in part due to allegations from the FTC that the Dallas-based company has not taken steps to tackle fraudulent money transfers, allegations the company settled in 2018. In addition to improved technology, MoneyGram also has a process to talk to customers According to Andy Villareal, MoneyGram’s compliance chief, this has been flagged as potential fraud victims, which has helped reduce romantic scams using the company’s services.

If a requested money transfer is marked as suspicious, MoneyGram can ask if the sender actually met the intended recipient before completing the transfer. The company could also tell the customer that he or she could be a victim of fraud, he said.

Such calls are often received in denial; People don’t want to believe they’ve been scammed for connecting to the recipient, Mr Villareal said.

“The reality is that fraudsters are very good at identifying the types of psychological aspects that they can connect to their victims,” ​​he said. “They make use of it and get very practiced at it.”

Write to Jack Hagel at [email protected]