Romance scams: A hidden danger in the digital dating world

In an era defined by swiping right (and left!) and digital courtship, the pursuit of love has taken an insidious turn – romance scams. As online dating continues to surge, a growing number of individuals fall victim to these devious ploys every year, presenting a formidable challenge that financial institutions must tackle head-on. This is an increasingly common risk that has ensnared 31% of Americans, according to research from McAfee. In the UK, the victim count increased by 22% last year alone[1].

Unveiling the grim truth

While the convenience of online dating has revolutionized how romantic connections are forged, a darker underbelly looms large. Romance scammers exploit emotional vulnerabilities, crafting elaborate personas to cultivate trust and affection before inevitably demanding money. The consequences are severe – not only are victims left emotionally devastated, but they also face financial losses.

The modus operandi

These scammers are masters of deception, employing tactics such as:

• Crafting fake identities and fabricated stories on dating apps and social media
• Showering targets with affection to establish deep emotional connections
• Evading in-person meetings or video calls to sustain their facades
• Gradually escalating pleas for financial assistance under the guise of emergencies or travel funds to fulfill their “desire to meet” in person.

Despite men falling prey to romance scams more frequently than women, female victims report higher average losses of £9,083 compared to £5,145 for their male counterparts. The age group 55-64 is most at risk, while those 65-74 lose the highest amounts – a heartbreaking £13,123 per victim on average.[1]

Enter the new frontline

At the epicenter of financial transactions, banks are at the forefront of the battle against romance scams. Identifying and preventing Authorised Push Payment Fraud (APPF)—the primary mechanism employed by these scammers—is paramount. Failing to do so not only facilitates the successful exfiltration of funds but also saddles banks with the cost of reimbursing undetected APPF cases under the new Contingency Reimbursement Model (CRM), effective October 7th.

Effectively combating romance scams necessitates best-in-class specialist solutions leveraging extensive data resources and advanced AI

The lynchpin: Advanced AI

Combatting the ever-evolving tactics of romance scammers necessitates a formidable arsenal – one that Lynx is uniquely positioned to provide. Our advanced AI solutions, powered by our unique and proprietary Daily Adaptive Models, continually analyze vast troves of data, including consumer spending behavior, uncharacteristic patterns, and online fraud signals. These models undergo daily training with fresh data, ensuring they adapt to emerging threats, changing customer behaviors and novel fraud techniques, and, crucially, avoid data drift.

Through our unified transaction monitoring capabilities, we fortify financial institutions against the insidious activities of romance scammers. We accurately and swiftly detect APPF in real-time while simultaneously identifying and blocking incoming transfers to mule accounts. This comprehensive approach prevents financial losses while shielding institutions from the burden of reimbursement costs.

Forging a path forward