Romance fraud in the UK reached £106 million in losses
last year, with reports up 9%, according to a new regulatory review. Scammers exploit online relationships, manipulating victims into sending money, while banks often fail to intervene.
Romance fraud has quietly become one of the
fastest-growing forms of financial crime in the UK, exploiting emotional
vulnerability to drain life savings. A new regulatory review reveals how
criminals manipulate victims over weeks or months, bypassing banking safeguards
and leaving customers emotionally traumatized and financially exposed.
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Survey of Banks Exposes Major Weaknesses
The review examined six major and challenger firms to
assess how they detect and prevent romance fraud and how they treat victims.
Although some banks demonstrated strong interventions and victim care, results
were inconsistent across the industry.
Fraudsters used social media and dating platforms in
85% of reviewed cases. They built trust through emotional manipulation before
making financial requests, often starting with low-value payments to avoid
detection.
Monitoring systems sometimes flagged unusual behavior,
such as repeated payments to a new beneficiary or sudden cryptocurrency
transfers. In another case, a flagged cryptocurrency transfer led to the uncovering of coercion by a fraudster.
However, large gaps remain. Critics say the absence of
consistent system calibration leaves customers at unnecessary risk. In one
case, a firm failed to detect six overseas transfers totaling £131,000 despite the customer having no history of sending money abroad. Another victim made 403
payments over a year, losing £72,000 without intervention.
Banks relying heavily on scripted customer
interactions reportedly struggled to uncover fraud. Victims influenced by
social engineering frequently concealed the truth. In 42% of cases, they provided false stories or fabricated documents under a fraudster’s instruction.
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Others failed to act on clear safeguarding concerns.
Some did not escalate cases even when customers showed signs of emotional
distress or coercion. In one example, police were not contacted despite a
victim reporting violent threats from a fraudster.
Education Remains Patchy Despite Rising Risk
Banks that performed well used vulnerability markers
on accounts, regular welfare checks, and temporary account restrictions to
prevent re-victimization. However, 15% of reviewed cases involved customers
previously targeted by fraud, suggesting weaknesses in ongoing protection.
Most firms ran fraud awareness campaigns, but the impact
varied. Some used well-designed app features and educational modules, while
others relied on static website warnings that failed to reach at-risk
customers.
The review concludes that firms must combine robust
monitoring with trained staff capable of holding meaningful customer
conversations. Better early intervention, data-sharing between banks, and
targeted safeguards for vulnerable customers are key priorities.
Romance fraud is expected to increase further as
scammers exploit AI tools and private messaging platforms. The regulator says a
coordinated response between firms, law enforcement, and government is essential
to reduce harm.
This article was written by Jared Kirui at www.financemagnates.com.
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