The latest UK fraud figures make for shocking reading. The City of London Police, the national lead force for fraud, recently revealed that romance scammers stole over £106 million from victims over the last year.
Criminals are increasingly looking to take advantage of those looking for love, with data from the National Fraud Intelligence Bureau (NFIB) showing a 9% spike in reports from victims who have lost over £11,000 on average.
Romance scams involve criminals building trust with victims, convincing them they are in a genuine relationship before tricking them into sending money. Scammers use language and the emotional connection they’ve built to manipulate and exploit their victims so that their requests for money don’t raise suspicions. When they ask for money, scammers often appeal to their victim’s emotional side, such as claiming they need money for urgent medical care.
Romance fraudsters often choose peak moments when consumer spending is at its highest to target unsuspecting victims. Valentine’s Day is clearly a prime target for predatory criminals, but other periods are also likely to see a spike in fraudulent activity – from Christmas to a new series of Love Island launching.
In the first episode of Scam Detectors, a podcast hosted by freelance tech journalist Jane Wakefield, we hear the story of romance fraud victim Debbie, who ended up losing nearly $60,000 to a fraudster whom she met on an elite dating app. She transferred the money from her retirement funds. Initially, he was responsive and grateful for the cash before fabricating an argument and disappearing. Debbie’s story highlights the financial losses and emotional distress that impacts victims. To this day, the scammer has never been caught.
Unfortunately, romance scams are just one aspect of the growing fraud epidemic. Three in ten (30%) UK adults have been victims of financial fraud, and more than half (55%) have seen increased scam attempts in the last 12 months. The latest figures from UK Finance indicate that fraud is now the most common crime in the UK, accounting for 40% of all offenses recorded in England and Wales and resulting in losses of almost £1.2 billion.
In the US, romance scams cause the most significant financial impact out of any scam, according to recent research from Featurespace and PYMNTS Intelligence, with average losses estimated at $2,000 from romance scams. This is nearly double the next financially damaging type of scam in the US – investment scam losses are over $1,100. Shockingly, also in the US, over 60,000 romance scams were reported in 2023, with romance scammers often stringing targets along for 3.6 transactions on average – nearly twice as many as other scams.
The techniques used by fraudsters are becoming increasingly sophisticated. For example, scammers would previously avoid using video calls to avoid revealing their physical features and identities to their victims. Now, they can use deepfake tools to hide their identity and create an entirely new persona. More convincing and high-tech methods such as this make it even harder for consumers to realise they’re being scammed, which can result in more significant losses.
Boosting consumer awareness of the risks of romance scams is key – financial providers have already communicated with customers about the dangers of these scams and what they should be looking for to spot potential fraud attempts.
But education will only go so far – to maximise consumer protections, financial providers must ensure that they utilise the latest anti-fraud measures and AI technologies to proactively identify and prevent fraudulent transactions by analysing transactions in real-time to stay ahead of evolving scam tactics.
By utilising transactional data, AI solutions empower financial institutions to identify and prevent unusual or fraudulent transactions in milliseconds while protecting consumers and considerably reducing losses for everyone affected.
