Online Romance Scams Result in Estimated $133 Million Losses
A surge in online romance scams has led to a staggering estimated loss of $133 million, according to recent reports. The scams, which typically involve fraudsters posing as potential romantic partners online, have become increasingly sophisticated and widespread.
Rise in Online Romance Scams
The Federal Trade Commission (FTC) reported that scams starting on social media more than tripled in the past year, with a sharp increase in the second quarter of 2020. Similarly, the Financial Crimes Enforcement Network (FinCEN) noted that reports of people losing money to scams that started on social media increased significantly during the same period.
Methods Used by Fraudsters
Fraudsters use various methods to defraud victims, including:
- Fake passports and bank accounts
- Credit cards and stored value gift cards
- Creating elaborate online profiles to gain trust before asking for money or personal information
They often adopt a fake online identity to build a relationship with a victim, then use that connection to manipulate or steal from them. Scammers may ask for money to be wired to bank accounts, debit cards, or virtual wallets controlled by the fraudsters.
Organized Fraud Rings and Money Laundering
Law enforcement agencies have observed that organized fraud rings are increasingly using credit cards and stored value gift cards to launder money. In 2021, during a 10-week Money Mule Initiative campaign, authorities took action against approximately 4,750 individuals suspected of being money mules.
The National Money Laundering Risk Assessment noted that large organized fraud groups use vast money mule networks as third-party money laundering mechanisms to launder illicit proceeds from fraud and other financial crimes. The report highlighted the growing threat posed by transnational criminal organizations (TCOs), which are increasingly using online platforms to facilitate their illegal activities.
Prevention and Action Required
To stay safe online, be aware of these scams and take steps to protect yourself:
- Be cautious when engaging with people you meet online, especially if they ask for money or personal information.
- Verify the identity of your online contacts and be wary of sudden requests for financial assistance.
- Report any suspicious activity to the Federal Trade Commission (FTC) or your local law enforcement agency.
Remember, staying safe online requires vigilance and awareness. Take action today to protect yourself from these scams!