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Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

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June 29, 2020

How Do You Love Me? Let Me Count the $$$$

The COVID-19 pandemic has affected everyone's life in some way. Sadly, criminals prey on the chaos created by such situations. We posted back in 2014 about a variety of advance fee scams where victims are duped into sending funds to the criminal, and more recently mentioned these scams in a post about elder financial exploitation. The latest figures from the Federal Trade Commission show that approximately 25,000 consumers reported losses of $201 million in 2019Off-site link—nearly 40 percent more than in 2018—from romance scams. And this figure is only for reported losses. While the elderly are often a target, victims are adults of all ages and genders. With the social isolation created by the pandemic, romance scams appear to be increasingOff-site link at a faster pace.

A romance scam often starts with the criminal placing a false profile on an internet dating site. In some cases, the website is completely fraudulent with a large base of false identities, and it collects payment card information for subsequent fraudulent transactions in addition to operating the advance payment scam. After some message exchanges on the dating site, the scammer will encourage the victim to use a private communication channel such as email or text messaging. In the past, the criminal would usually avoid video chats to reveal their true identity. Today, however, these criminal efforts have become increasingly sophisticated. They often have the same person whose photograph they used on the site do these video chats. The criminal will often claim to live or work in a foreign country or at considerable distance from the victim to discourage the victim from visiting. The scammer will often research social media sites to gain more information about the victim's hobbies and interests to help convince the victim that they are "true soulmates."

The criminal tries to deepen the relationship with frequent claims of affection and may even send small-value gifts to the victim to build trust. Once the criminal believes they have the victim "hooked," the financial requests begin. Often it will be a request to send money to pay for medical services for a close relative, or to help the scammer get through some financial hardship. The criminal may also request nonfinancial items, including intimate photographs or videos to be used for extortion later. There may be a request for money or payment card information for the scammer to purchase an airline ticket to come visit the victim, a trip that never happens due to a sudden illness or other excuse.

Education is the key to the prevention or early detection of such a scam. The FTC recommends the following:

  • Never send money in any form to someone you haven't actually met. If someone you've met online asks you for money, report it to the Federal Trade Commission (FTC) at ftc.gov/complaintOff-site link.
  • Perform a reverse image search of the person's profile picture to see if it matches with another person's name or if there are other discrepancies. (Some apps provide this service, as does at least one search engine.)
  • If you discover that you are, in fact, being scammed, stop communicating with the person immediately, but save the messages.
  • If the initial contact was through a dating website, notify the site of the scam.

The Federal Reserve joins with the FBI, FTC, and consumer organizations in helping to educate the public against these criminal activities. Please use any channels you have to spread this educational effort and clean up this slimy activity.

Now go wash up.

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