Romance Scams and Social Engineering: Fraudsters Looking for Love

Looking for love can be an online adventure. It entails swiping through profiles on dating websites and popular social apps. Unfortunately, apps have become the new playground for romance scammers. 

Most people say they wouldn’t fall victim to a romance scam, or if they did, they’re too ashamed to admit to it. Fraudsters count on that. These criminals are experts at spotting the type of person who might be more vulnerable to a romance scam. And it’s hard to identify the signs, especially when emotions are involved.

This Valentine’s Day, we’re spotlighting prevalent fraud schemes used in #romcons, their associated red flags, and how you can protect customers from becoming a victim. 

“Scams overall increased 11% in value and 22% in volume, while romance scams increased 133% in value and 50% in volume last year” – according to collective intelligence from the 2024 NICE Actimize Fraud Insights Report.

Authorized Push Payment Fuels Scams

Peer-to-peer authorized push payment (APP) applications such as Venmo and PayPal have made splitting the check on dates easier than ever. They’re a quick and easy way to send money to people you know for bills, birthdays, and other occasions. But beware: an account takeover, a type of fraud where a customer didn’t authorize the transaction, can be disputed and potentially reversed, but that’s not what happens if the customer directed the payment. In that case, the victim of a scam who authorized the payment likely has liability if it’s fraudulent.

To address this, regulators in the UK have implemented a refund requirement that splits the liability 50/50 between the paying and beneficiary banks in the case of authorized, or authorized push payment, fraud. But generally speaking, many banks do not reimburse authorized fraud. With limited avenues for shifting the liability, it becomes a loss to the consumer—even if a bad actor acquired the funds through fraudulent scams and coercion of the customer, as is the case in #romcons. 

Social Engineering Love

Social engineering techniques are used in all kinds of fraud, but they’re devastatingly effective in romance scams. The fraudster leverages the trust built on fake romantic emotional entanglements. The infamous Tinder Swindler lied about his safety being threatened or an important upcoming business deal to create a sense of urgency. He’d coerce victims to open credit cards under their own names and provide him with the account details to avoid a paper trail. This also helped him avoid liability, as the charges were under his victims’ names and accounts, making them ultimately responsible for the debt.

To achieve trust, the fraudsters mold their identity to be a dream come true, personally tailored for each victim. Romance doesn’t always factor into the equation, either; fraudsters also take on the role of a best friend. They can craft a false image supported by social media to add legitimacy to their claims. The Tinder Swindler assumed many identities, from a pilot to the heir of a diamond empire, all backed by Instagram accounts with “photographic evidence.” Using Photoshop skills as well as social engineering, he was able to manipulate situations to contain the key ingredients of trust, love, and urgency.

“A Northern Ireland woman was swindled out of her life savings of £112,000 in a devastating romance scam. The woman was persuaded to put her money in cryptocurrency, with the promise of a quick profit. This did not materialize.” – BBC

Link Between Romance Scams and Ponzi Schemes

A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. In the case of the Tinder Swindler, he used money scammed from one victim to wine and dine his other victims, using stolen funds to pay for luxury hotels, fine food, and couture fashion. In many cases, he perpetrated a Ponzi scheme by tricking the victim with overly generous returns (an investment scam), employing them at his fake companies (employment scam), and sending fake checks and made-up bank transfer receipts. This further strengthened the trust in the relationship—until the checks didn’t clear.

Link Between Romance Scams and Money Mules

In some scenarios, the victim becomes a money mule, sometimes with full knowledge that they’re participating in an illegal scheme (a witting mule). This happens when a scammer brings a love interest into the operation and promises the mule a financial reward for conducting financial transactions that benefit the fraudster. As a money mule, the victims bear responsibility for these scams if they willingly and knowingly accept fraudulent deposits or pass them on to other fraudster-controlled accounts. Law enforcement agencies aggressively prosecute money mules, both in cases where customers fail to heed warnings that they’re helping a fraudulent scheme or when they’re actively participating in the scam. That’s a common red flag in these kinds of scams, an old adage that still rings true: If an opportunity seems too good to be true, it probably is. 

Fraudsters Move at the Speed of Technology

Thanks to technology, it’s easy to make official-looking documents. Fraudsters don’t even need to be proficient at Photoshop: a lot can be accomplished with a simple word processor. Creating realistic documentation is a common practice in romance scams. To add further legitimacy to his claims, the Tinder Swindler falsified numerous items including bank statements, pay stubs, checks, bank transfers, websites, receipts, and even passports. He employed a multifaceted approach by mixing these fake documents with his real-time shared Google geolocation or a live video call from WhatsApp. To achieve his financial goals at the scale needed to fund his lavish lifestyle, specific plays were repeated across victims, which made it easier to quickly customize tried and true document and video templates.

Victims are Most Vulnerable Around Holidays

Fraudsters are keen to execute scams during times where victims might be most susceptible to a romance scam. These are five tips to date without being charmed into being defrauded:

5 Tips to Avoid Romance Scams

1. You’re asked for money, and that request has a sense of urgency—don’t pay and take a step back to carefully evaluate the request
2. You’re asked to sign up for credit cards or transact funds on behalf of the charmer—don’t become a money mule for love
3. The charmer’s internet presence can’t be verified by multiple sources—don’t believe what you read on the Internet, even if that moment seems real (like the perpetrator shows traveling for business via a private jet)
4. The documents offered have discrepancies, such as the bank’s letterhead has conflicting contact information—don’t accept that documents you receive are valid. Instead, contact the financial institution yourself
5. You fall victim to a romance scam—don’t keep it to yourself. Contact law enforcement to help catch the fraudster. It’s almost certain that the fraudster is executing the romance scam with other victims

These criminals are experts at manipulation and always refining their social engineering tactics—they’re extremely convincing. Even fraud teams at institutions must constantly update their technology and tactics to detect and stop emerging and existing threats. They also must continue educating customers about these life-altering frauds that become more sophisticated and believable as technology advances.

To learn more about emerging fraud threats, check out the latest Fraud Insights Report.