My Phony Valentine: Covid Fuels Romance Scams

About 32,800 romance scams were reported last year, nearly 31% more than in 2019, according to data from the Federal Trade Commission released last week. Consumers reported losing a record $ 304 million to the scams, an increase of nearly 51%, the FTC said.

Romance scammers 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 as to why they cannot meet in person. Sometimes it’s a fraudulent military deployment, other times it’s a made-up order on an offshore oil rig, said Monica Vaca, a co-director at the FTC. As a virtual relationship intensifies, scammers make requests for money, and often disappear once the cash is in hand.

The current conditions are ripe for such fraud, said Ms. Vaca said. Social distance has complicated personal appointments. People spend more time online. There is a general increase in the use of dating apps. And the pandemic has increased the alleged credibility of money requests – for example for medical bills or car repairs to appoint a vaccine.

Travel restrictions and health reasons seem to give fraudsters legal excuses to prevent them from meeting victims. ‘We see in our reports people say things like,’ Oh, I can not meet; “I just got my Covid diagnosis,” she said. Vaca said. “So it becomes part of the storyline.”

Consumers need to be vigilant, she said, but also companies that are subject to money laundering rules to report suspicious activity. “They play a very important role in this,” she said. Vaca said.

The prevention of fiscal transactions has become easier in recent years as financial institutions and money transfer companies have sharpened their data analysis tools. As fraudsters change tactics, businesses can adapt systems to adapt to new patterns, which can detect suspicious activities or suspicious customers more quickly.

This is partly how Western Union Co.

managed to keep abreast of fraudsters’ evolving tactics, said Tyler Hand, the money transfer company’s compliance officer. Improvements in the Denver-based company’s monitoring technology over the past few years have led to a decrease in the number of romantic scams reported at the company, including in the past calendar year, he said. Some of these changes were made as part of a settlement with federal authorities, including the FTC, over alleged failures of police clients possibly involved in fraud.

One thing that cannot be solved by an algorithm: human gullibility in the light of possible romance. This is why Western Union and competitor MoneyGram International Inc. says customer outreach and training is also key.

MoneyGram strengthened its monitoring in part due to FTC allegations that the Dallas-based company did not take steps to curb fraudulent money transfers, allegations that the company was settled in 2018. In addition to improved technology, MoneyGram also has a process of talking to customers. according to Andy Villareal, head of compliance at MoneyGram, identified as potential fraud victims, which helped reduce romantic scams.

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

Such calls are often denied; people do not want to believe that they were cheated because they made a connection with the recipient, said Mr. Villareal said.

“The reality is that fraudsters are very good at identifying the kinds of psychological aspects that can connect them to their victims,” ​​he said. “They exploit it and get very used to it.”

Write to Jack Hagel by [email protected]