My Phony Valentine: Covid Fuels Romance Scams

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

Romantic scammers often create fake online personas to develop relationships with victims through online dating apps or social media platforms. They keep their distance, however, making excuses as to why they can’t meet in person. Sometimes it is a fake military deployment, other times a mission invented on an offshore oil rig, said Monica Vaca, associate director of the FTC. As a virtual relationship strengthens, scammers make requests for money, often disappearing as soon as the money is in hand.

Current conditions are conducive to this type of fraud, Vaca said. Social detachment complicated personal dating. People are spending more time online. There is a general increase in the use of dating apps. And the pandemic has increased the perceived credibility of requests for money – for, say, medical bills or car repairs to reach a vaccine appointment.

Travel restrictions and health reasons are also giving fraudsters seemingly legitimate excuses to avoid meeting victims. “We are seeing in our reports people saying things like, ‘Oh, I can’t find myself; I just received my diagnosis of Covid ‘, ”said Vaca. “So, it becomes part of the story.”

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

Avoiding dubious transactions has become easier in recent years, as financial institutions and money transfer companies have increased data analysis tools. As fraudsters change tactics, companies can adjust systems to adapt to new standards, allowing for faster detection of suspicious activity or doubtful customers.

This is partly how Western Union Co.

managed to stay abreast of developments in fraudsters’ tactics, said Tyler Hand, director of compliance at the money transfer company. Improvements in the Denver-based company’s monitoring technology in recent years have led to a decrease in the number of romantic scams reported at the company, including last year, he said. Some of these changes were made as part of an agreement with federal authorities, including the FTC, about alleged police failures of customers who may be involved in fraud.

One thing that cannot be fixed by an algorithm: human credulity in the face of a possible romance. That is why Western Union and competitor MoneyGram International Inc. say that customer reach and education are also critical.

MoneyGram strengthened its monitoring in part because of the FTC’s allegations that the Dallas-based company did not take steps to suppress fraudulent money transfers, allegations that the company settled in 2018. In addition to improved technology, MoneyGram also has a process for talking to customers flagged as potential victims of fraud, which helped reduce romantic scams using the company’s services, according to Andy Villareal, MoneyGram’s chief compliance officer.

If a requested money transfer is flagged as suspicious, MoneyGram can ask if the sender really knew the intended recipient before completing the transfer. The company can also tell the customer that he may have been a victim of fraud, he said.

These calls are often received with denial; people do not want to believe that they have been cheated because they have established a connection with the recipient, said Villareal.

“The reality is that fraudsters are very good at identifying the types of psychological aspects that can connect with their victims,” ​​he said. “They exploit it and become very experienced in it.”

Write to Jack Hagel at [email protected]