PlainsCapital Bank notices rise in romance scams related to COVID-19
As socially-distanced dating is on the rise, fraudsters have found a new twist on the romance scam.
According to an article by CNBC, the pandemic has brought an influx of people using online dating applications and platforms. Apps like Bumble started seeing messages and interaction increase over 20 percent in March, and the wide reach of video hosts like Zoom and Google Hangouts have created more popular video and audio dates.
As the frequency of online dating rises, so do the fraudsters in search of victims. The Federal Trade Commission stated that as of February 2019, romance scams rank number one on total reported losses.
Romance scammers, using false online profiles and identities, create attractive personas for victims. Once they have the victims “by the heartstrings,” scammers tend to “say they need money, often for a medical emergency or some other misfortune.”
The FTC noted fraudsters will often “claim to be in the military and stationed abroad,” as an explanation for why they cannot meet in-person. They have also pretended “to need help with travel costs for a long-awaited visit.”
Denise Owens, CFE, the Fraud Manager for PlainsCapital Bank, said that the coronavirus pandemic has created a new avenue for romance and work-from-home scams.
“I would say we probably noticed the uptick in early April,” Owens said. “It was pretty quickly after the country started shutting down and people were working from home.”
In 2018, Consumer Sentinel found 21,000 people in the United States reported romance scams, with losses totalling $143 million. This is a swift uptick from 2015, during which about 8,500 people reported losses totalling $33 million.
PlainsCapital Bank noticed that romance scammers started using COVID-19 related expenses as an excuse for victims. Owens said the emotional aspect of the romance scam is what keeps those victims vulnerable.
“It’s very hard for the victim to believe it’s a scam,” Owens said. “They will just continue in the cycle of sending funds out even if their family, friends and the bank advise them that it is suspicious.”
The FTC found that people aged 40 to 69 reported losing money to romance scams at the highest rates, more than twice the rate of people in their 20’s. They also stated that “at the same time, people 70 and over reported the highest individual median losses at $10,000.”
Owens stressed that romance scams target people of all ages and walks of life.
“We are seeing an uptick in elder customers involved in romance scams,” Owens said. “But it really is every age.”
The majority of victims usually wire money to fraudsters, but they also often send money by “using gift and reload cards (like Moneypak)” and mailing the cards or giving the PIN number on the back to the scammer. The FTC said with this method, fraudsters “get quick cash, the transaction is largely irreversible and they can remain anonymous.”
Owens spoke about how fraudsters often become more aggressive when victims question their excuses for funding.
“If you’re on a dating site, or you meet someone through Facebook or really any of the social media sites, and the individual [fraudster] wants to move that relationship ahead very quickly, they’ll start requesting favors,” Owens said. “The victim really needs to take the time to ask questions and really push back, and truly understand what is going on.”
Asking a lot of questions and pushing back against the favors leads to fraudsters becoming more demanding.
“Most of the time if they spend any time looking into the details, it doesn’t really make sense,” Owens said. “But because there are emotions involved and they [victims] think they truly know this person, or they’re engaged to this person who they’ve never met in-person, they move forward and want to please them, so they go ahead and send those funds.”
Owens recommended that if the victim has never met a significant other in-person, they should ask questions and talk to their bank, family and friends. Isolating victims is often a strong tactic in keeping the scam going and making it successful.
“They always want the victim to keep everything confidential,” Owens said. “[They say] ‘Your family and friends don’t need to know what we’re talking about, you don’t need to tell the bank what this is for,’ because they really want to alienate the victims so that the only person they’re speaking to is the suspect.”
The median reported loss to romance scams is estimated at $2,600 per individual according to the FTC, which is seven times higher than other fraud types.
“The one thing that fraudsters are very good at is adapting to a situation, and COVID has given them the perfect situation – people are at home, they’re isolated and they can’t spend as much time with their family and friends, so they’re going online and the fraudsters are taking advantage,” Owens said. “There are people out there who are waiting to prey on others if they’re not diligent and asking questions.”
Owens said it is perfectly fine to have an online relationship, but be aware of the risks and pay attention to what is going on. Another scam that has seen a rise due to the pandemic is work-from-home scams.
“If you’re applying for a job online, and that individual is asking you to send money to work, that is a red flag,” Owens said. “You should never have to pay to work for someone. Or, if they send you a check and are telling you to send that check onto someone else, does that make sense? Why would a company send you a check and then ask you to deposit it and forward the funds to someone else?”
PlainsCapital Bank offers online training options for people who may be susceptible to fraud attempts.
“We have all types of training on our website that people can go out and review on romance scams, work-from-home scams, lottery scams and many different topics,” Owens said. “We also train our staff to be aware and look for the red flags so we can speak to our customers and try and identify this type of activity before the customer sends the money out.”
Owens said the funds lost to scammers can often never be recovered.
“Once they send the money out, it’s very difficult if not impossible to get the funds back,” Owens said. “Always ask questions and make sure it makes sense.”
