Romance Scams

Over the past few decades, many Americans have turned to online dating apps looking for love. A Pew Research Center survey found 3 in 10 Americans have used online dating, and 1 in 6 adults over 50 have used dating apps. Unfortunately, the vast majority of phony romantic overtures take place on online dating apps and on social media platforms (Facebook, Instagram, and Snapchat). Romance scams which begin on social media usually end up costing the most. Over the past three years, consumers lost over $2.7 billion in social media fraud, with crypto investment and romance scams resulting in the steepest losses.

While romance scams are not new, their popularity has risen since the pandemic as more people use the internet to connect with the outside world. Even now with a return to more face-to-face meetings, romance scams are going strong. The scams are sophisticated with well-developed scripts and playbooks, training, and technology, all aimed to defraud victims, the majority over age 55. Older victims are targeted because they typically have more assets and often are less familiar with online security. Scammers build their victim’s trust over several months. Victims are led to believe they are in a committed relationship before being tricked into sending money, valuables, and personal information, or to launder money on the perpetrator’s behalf. In addition, some scammers convince their targets to invest in fraudulent cryptocurrency schemes.

Romance scammers use social media and dating apps to reach their targets because they can easily create fake profiles and tailor their personas to content victims share and like. Their primary goal is to gain your trust and affection by paying close attention to the information you share in an attempt to become your perfect match. They will seem genuine, caring, and believable. Criminals can even use advertising tools to methodically select targets based on personal details such as age, interests, or past purchases. More recent trends involve romance scammers using artificial intelligence (AI) to draft convincing emails, create fake photos in the likeness of their target’s recently departed spouse, or develop deepfake videos of celebrities endorsing their investment scheme.

Have you, or someone you know, been a victim of a romance scammer? I have firsthand experience. I dipped my toe into the world of online dating after my divorce. What an eye-opening experience - it is not for the faint of heart. I have many tales to tell – as do most of my single and divorced friends who have tried it. Fortunately, I was not a victim of a scammer, but came close. I recently learned through a woman (a practicing attorney in Florida) that one of my early connections on eHarmony was a scammer with multiple identities. He had tricked several women out of large sums of cash, all over the US. She reached out to me after he had tried to scam her. I never met him - my sixth sense told me early on that something was off. He quickly told me he loved me and had never met anyone like me - yet we had not even met! I shut him down immediately, but had a glimpse into how this can easily happen to people seeking love and relationships.

While most people end the faux relationship quickly, more than 25% have engaged with a scammer for more than two weeks. The longer someone was “together” with a scammer, the more money they lost. While the majority of those targeted by a romance scam did not lose money, the ones who

did lost quite a bit of cash, sometimes over $10,000, and a median loss of $2,000 per victim. These losses can significantly impact one’s finances, especially in lower income brackets. Romance scams are now the 3rd costliest fraud type reported to the Federal Trade Commission (FTC) by Americans aged 60+. According to a recent study, 94% of those who lost money were unable to recover it.

Victims report significant feelings of betrayal and shame on top of their financial burden. Many victims are reluctant to report a scam due to the stigma. Almost half of romance scam victims don’t tell anyone what happened; many more only share details with a close friend or family member. So, what can you do to avoid a romance scam? According to experts, here are some tips:

Learn how to spot the signs that someone is NOT who they say they are:

· Their profile and picture seem too good to be true. Trust your gut and ask lots of questions. Beware if they seem too perfect, or quickly asks you to leave a dating service or social media site to communicate directly.

· They profess love and affection very quickly.

· They share a lot about themselves in the first meeting.

· They claim to be overseas and cannot stay in one place for long.

· They try to lure you from whatever platform you are on to talk to you via email or video chat.

· They claim to need money for something.

How to keep yourself safe:

· Refrain from sharing personal details when posting online. Scammers rely on what you volunteer about yourself online to tweak their script and lure you in. Do not give any personal information or money to anyone you have only communicated with by telephone or online.

· Use reliable software to minimize the amount of data accessible through search engine results, spam lists, and people search sites.

· Perform an image search to see if the image, name, or details have been used elsewhere. Scammers often steal someone else’s image to use as bait, and stolen identities are rife.

· Go slowly and ask lots of questions. If you suspect an online relationship is a scam, stop all contact immediately.

· Scammers tend to rush, building rapport with their victims as quickly as possible before moving in for the money-themed kill.

· NEVER give money to anyone you’ve met online.

· Beware if the individual attempts to isolate you from friends and family or requests inappropriate photos or financial information that could later be used to extort you.

· If you plan to meet in person someone you have only been in contact with online, proceed with caution, especially if you plan to travel to a foreign country to do so.

· Get a second opinion from someone you trust. Ask if they are concerned about your new love interest.

Learn the lies that romance scammers use:

· Scammers say they can’t meet you in person because they say they are living or traveling outside the country, working on an oil rig, in the military, or working with an international organization.

· Scammers will ask you for money. Once they gain your trust, they ask for your help to pay medical expenses (for them or a family member), buy their ticket to visit you, pay for their visa, or help them pay fees to get them out of trouble. They may even offer to help you get started in cryptocurrency investing.

· Scammers will tell you how to pay. They want your money quickly and it ways that make it hard to get back. They might ask you to wire funds through Western Union or MoneyGram; add $ to gift cards with PIN codes; send money through a money transfer app, or transfer cryptocurrency.

How to Report a Romance Scam

· If in doubt, back away and report the account.

· If you paid a romance scammer with a gift card, wire transfer, credit or debit card, or cryptocurrency, contact the company or your bank right away. Tell them you paid a scammer and ask them to refund your money. · If you think it’s a scam, report it to the FTC at ReportFraud.ftc.gov. Notify the social networking site or app where you met the scammer, too.

It is very important to use caution to stay safe online. Scammers continually look for new ways to trick you into giving them your information. Consider using Reddit: https://www.reddit.com/r/Scams/ to keep abreast of the latest scams.

If you have any concerns or questions about securing your accounts, be sure to reach out to a financial professional. If you are not currently working with FPS, we would be happy to talk with you. Questions? We are here to help.

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Best regards,

Janet Rhodes Friedman, CFP®, CDFA®, MBA

Janet@PlanWithFPS.com

617-630-4978

Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.