Three tips to protect our members from romance scams
According to a new report issued by the Federal Trade Commission (FTC) romance-related scams are on the rise and have cost victims more in total reported losses than any other type of consumer fraud in 2018. The numbers are staggering.
What is a romance scam?
Romance scams involve scammers preying upon the lonely and luring them into sending money. Fraudsters target singles through online dating sites or apps (i.e. Match.com, eHarmony) and via social media sites like Facebook. The fraudsters will create a phony online profile and even go so far as to lift a photo of an attractive person from the internet to use on their profile. Sometimes fraudsters will also use fake names or assume the identifies of real people.
“Typically, the scammer builds trust by writing long letters over weeks or months and crafting a whole persona for their victims,” says FBI Supervisory Special Agent David Farquhar. “That big investment gives victims a false sense that the relationship must be real.”
Once the victim forms an emotional attachment to the fraudster, the pitch for money comes. The scammer will say they have some sort of emergency and need money right away for medical reasons, legal troubles, or some other misfortune. The urgent nature of the request makes it hard for the victim to take the time to do their due diligence, so they end up sending the fraudsters money. According to the FTC report, people often reported sending money repeatedly for one supposed crisis after another.
The movement of funds and financial impact to victims
The FTC report stated that the majority of victims sent the fraudsters money through wire transfers. The next largest group said they sent the money using gift cards and reload cards. Victims would mail the cards to the scammers or give them the PIN number on the back of the cards. The report indicated that these payment methods are preferred by con artists because it allows them to get quick cash, and the transactions are often irreversible.
In 2018, individuals who fell victim to romance scams lost $2,600 on average, about seven times higher than the median loss across all other fraud types. People aged 40-69 reported losing money to romance scams at the highest rates – more than twice the rate of people in their twenties. People 70 and older reported the highest individual median losses at $10,000.
How we work to protect our members from romance scams
• First and foremost, we work to know our members, and have a firm understanding of their normal spending patterns. For example, if an elderly member comes into our branch all of a sudden and requests to send a wire transfer to an individual in Nigeria, and this is not normal and expected activity for him/her, we don’t just facilitate the transaction. We stop and question it. (And yes, this may seem as if we are getting a little nosey.) We ask the member what the nature of the relationship is between him/her and the overseas beneficiary and inquire about the intended purpose of the payment. If the member’s explanation is vague, doesn’t make a lot of sense, or if the member becomes defensive, we will be on high alert that he/she may be a victim of a romance scam.
• Second, we work to stay familiar with the various romance scams. If a member tells us that she/he needs to send a wire to their “fiancée” in Ghana to help pay for medical bills because they were in a car accident, our ears perk up, as this explanation is consistent with the romance-scam typology. Remember, victims are often conned into sending wires because the scammer is claiming they need the money due to some sort of made-up emergency. If the reason our member wants to send money overseas is because their “sweetie, fiancée, or significant other,” who they have never met in person, has fallen on hard times due to a misfortune, we will be wary that they may be a victim of a romance scam.
• Third, we work to protect our member's best interest. If, after speaking to our member, something still doesn’t feel right about the situation, then it probably isn’t. We want to protect the monetary interests of all our members, and will probably not send the wire.
Please be aware and protect yourselves
Here are some tips to help you stay clear of people out to 'romance' you out of your money:
- Take any new relationship slowly. Ask meaningful questions and be wary of inconsistent answers.
- Do not give money or gifts to someone you have never met in person.
- Try to verify the person’s identity with image, phone number, and address searches.
- Tell your real friends or family about your potential romance.
Bottom-line - Keep your eyes open and if you suspect a romance scam, cut off all contact immediately and contact an FBI agent before they are caught up in a money laundering scheme.
Make sure you know who is getting your personal or financial information at all times. Scams of all kinds are on the rise, and you should protect your money and personal information with all due diligence. Don’t give out personal information on the phone, through the mail or over the Internet – especially on social media, unless you’ve initiated the contact or know who you’re dealing with. If a company claims to have an account with you sends email asking for personal information, don’t click on links in the email. Instead, type the company name into your web browser, go to their site, and contact them through customer service.
Always use strong passwords with your laptop, credit, bank, and other accounts. Be creative: think of a special phrase and use the first letter of each word as your password. Substitute numbers for some words or letters.
Don’t Overshare on Social Networking Sites. Never post your full name, Social Security number, address, phone number, or account numbers in publicly accessible sites. Social media has become the most used hub for scammers.
Consider opting out of pre-screened offers of credit and insurance by mail. You can opt out for 5 years or permanently. To opt out, call 1-888-567-8688 or go to www.optoutprescreen.com.
Rest assured, at Independent Federal Credit Union, we are always working to monitor our member accounts for any suspicious or unusual activity. Again, always remember; Independent will never ask you for personal or financial information over the phone, in a text, or in an e-mail. Please always be aware of phishing scams attempting to obtain any personal information from you!
Tips to protect our members from Romance Scams article By: Naomi Glass, BSA/AML Compliance Manager- Corporate One FCU