What is it that usually comes to mind when thinking about fraud? For some, identity theft or large-scale investment fraud, such as Ponzi schemes, comes to mind. However, “Romance Scams” are a form of fraud that has rapidly increased over the last two years. According to the Federal Trade Commission (FTC), reports of romance scams rose by 20% between the onset of COVID-19 in March 2020 and November 2020 alone. The FTC also reported that annual losses to romance scams hit a record high of $547 million in 2021, a 20% increase over 2020 and more than six times the losses reported in 2017.
What Is a Romance Scam?
The Federal Bureau of Investigation (FBI) defines a romance scam as “any scheme that occurs when an online actor takes on an assumed identity to gain a victim’s affection and trust.” Once trust has been gained, the bad actor creates the illusion of romance and intimacy to manipulate their victim. This relationship-building process can last for months, resulting in a situation where the victim develops a high emotional investment in the apparent relationship.
A primary motivation for romance scammers is financial gain and the theft of financial assets from an individual, families, or even corporations. Once a scammer builds a foundation of trust, they will often feed the victim sad stories to convince them to send money. Due to the relationship’s highly personal nature and emotional intensity, the scammer can often convince the victim to send large amounts, up to thousands or even millions of dollars. Victims have been reported to go to great lengths, emptying their life savings and even embezzling funds from their employer if they have access. Victims who have been ensnared in these scams may constitute substantial insider threats to companies should the demands of these scammers escalate. It is crucial, therefore, to recognize the indicators of a potential romance scam.
How Do You Recognize a Romance Scam?
Online romance scams most often start through dating apps or other social media platforms. Successful romance scams may be particularly convincing, as the perpetrators are motivated by substantial financial gain to spend significant time and effort to carry them out.
However, there are some key indicators that may help identify a potential romance scam:
- A romance scammer will typically set up a narrative claiming to be impossibly far away from the victim, usually in the context of being in the military, a traveling doctor, working on an oil rig, and the like.
- Profiles made by a scammer usually lack in-depth information or social platform activity and appear too good to be true. A scammer may research their intended victim, personalizing their messages using information garnered from the victim’s social media profiles or publicly available records.
- A romance scammer may move quickly to saying things like “I love you,” proposing marriage or moving communications to a more private or anonymous communication channel.
- When the topic of finally visiting or seeing one another comes up, a Romance Scammer will break their promises to visit or to meet. Often the excuse of expenses will come up, which leads to the next indicator:
- A romance scammer will eventually ask for money. Their request will be presented as part of a story in which they need money for travel expenses to meet the victim, or for other expenses such as medical expenses, gambling debts, court fines, etc.
- Following this request for money, a romance scammer will also seek to control the methods by which money is sent to them. This is done to prioritize transfer methods that are either difficult to stop or track. This can include wire transfers, preloaded gift cards, cryptocurrency exchanges, and even opening new bank accounts in the names of their victims.
- Lastly, a romance scammer may attempt to isolate a victim from their family and friends. They will discourage the victim from telling others about their relationship, their disclosure of financial information, and any financial transactions with the scammer. Like other types of scammers, romance scammers may also use the information they gather to extort their victims.
Romance Scam Examples
A recent example of a large-scale romance scam is the story of Dominique Golden of Houston, Texas. On September 1st, 2022, Golden pled guilty to $2.6 million in wire fraud and conspiracy to commit mail fraud in a court in Providence, Rhode Island. Golden collected nearly $1.3 million of this in cash, checks, money orders, and wire transfers from victims across the United States. She also worked with multiple accomplices trained in manipulating and extracting money from victims. This team would take a lot of time to develop relationships with victims, communicating via the internet and app-based platforms. She and her accomplices then directed the victims to send funds to bank accounts registered to fake people and businesses to which she had access.
Shimon Hayut is another high-profile example, featured in the Netflix documentary “The Tinder Swindler.” Hayut used Tinder, a popular dating app, to target women and manipulate them to fund his costly and luxurious lifestyle. Hayut took his scams a step further than many online scammers by actually meeting with his victims and giving them lavish gifts, such as dinners on private jets. These gifts were often funded by money from other women Hayut had previously conned, part of his effort to establish a false appearance of wealth. Following these encounters, Hayut would make fake claims of being targeted by his “enemies,” sending images and messages to indicate he had been hurt, had a “breach of security,” and no longer had access to his own bank accounts or credit cards. Hayut would then persuade his victims to open lines of credit or take out personal loans in their names to send him emergency funds, after which he would disappear.
These threats are all too real and are a personal violation in addition to a financial one. Be vigilant, learn the signs of romance scams, and always scrutinize any request for money.