Love is not the only thing in the air on Valentine’s Day as the rise in romance scams continues to become a far too common plague amongst vulnerable people.
Romance scams, the fraudulent practice of duping people into sending money by convincing people they have a genuine relationship with them, has seen an increase among victims over the past several years, with many financial services warning people to stay alert ahead of Valentine’s Day.
Silvija Krupena, Director of Financial Intelligence Unit at RedCompass Labs, revealed that Valentine’s Day is when romance scams usually take an uptick in cases and outlines some of the best signs both banks and consumers can learn from potential attacks.
She says: “Ahead of Valentine’s Day, we will see increasing warnings and campaigns about the danger of romance scams, while this is vital, banks also need to step up their game in spotting these crimes.
“From ‘pig butchering’ scams to traditional catfishing, these crimes often start with an innocuous message on social media and evolve into prolonged fake relationships, coercing victims into parting with significant sums of money – and leaving devastating impacts on their lives.
“Anyone can get scammed, it’s only a matter of scammers using the right script. Banks need to move away from the typical ‘box-ticking compliance’ culture. Instead, they should look more closely at their data and take a more proactive approach to preventing these types of crimes.
“Banks can spot suspicious behavioural patterns by looking for specific red flags in their customer data and adopting persona-based typologies. While crypto makes it difficult to track, this crime is not entirely devoid of red flags, particularly through banking data. When people start to act differently, banks can notice, intervene, and act before all is lost.”
A Rising Threat
Romance scams resulted in losses of over £94m in 2023 across the UK according to the National Fraud Intelligence Bureau (NFIB). Of the 8,792 reports, the average loss per person was over £10,000.
The research also highlighted that romance scams in the UK were now at all-time high rates, with an 8.4% increase from 2022.
One of the reasons why romance scams are becoming more prevalent is the sophistication in tactics performed by fraudsters to convince victims they are imitating a person who cares, or a person who is a family member or friend.
BioCatch Global Advisory Director, Jonathan Frost, notes that victims are not aware they are being targeted until the money is drained from their account and why financial institutions need to do more than transactional monitoring.
He explains: “Scammers are becoming more sophisticated with technology, such as AI, and while consumer education plays a role, it can only go so far. Often, by the time victims realise they’ve been deceived, their savings may already be drained. This makes tackling romance fraud particularly challenging for banks, as victims genuinely believe they are making legitimate payments.
“Transaction monitoring alone is not enough. Financial institutions must leverage behavioural insights and foster greater industry collaboration. A unified approach, where intelligence is shared, intervention strategies are strengthened, and behavioural analytics are used to detect this deception – is critical to stopping these criminals before more victims are exploited.”
The Prevalent AI Role
As Frost alluded to, AI is shaping the fraud and anti-fraud industry before our eyes. The early stage capabilities of Generative AI models have in turn seen the rise in AI-related fraud cases, such as deepfakes, with one victim losing over £80,000 as a result.
A fraudster tapping into deepfake technology targeted a woman pretending to be Hollywood actor Brad Pitt, impersonating him through sophisticated AI-generated images claiming that he needed money for his health.
This scandal garnered worldwide attention and is likely to date the most high-profile romance scam case, facilitated by the usage of AI. Dan McLoughlin, Head of Pre-Sales at Lynx Tech, warns this may be the start of the AI-fraud surge.
He said: “Romance scams are on the rise, and AI is very much a primary cause of this. Fraudsters are leveraging advanced technology to create highly convincing fake profiles. Generative AI and deepfake technology allow scammers to produce lifelike images and realistic video calls, making it difficult for victims to distinguish between real and fabricated personas. These AI-generated interactions are designed to build emotional connections over time, often leading victims to trust and eventually send money.
“The growing use of online dating apps has further amplified this issue, as scammers can now analyse individuals’ preferences to craft personalised, targeted scams. In fact, 11.1 million people in the UK alone used dating apps in 2023, and this number is expected to grow. As more people flock to digital platforms in search of companionship, scammers use AI to analyse individuals’ preferences, making it easier to craft personalised romance scams that hit the emotional sweet spot.
“To combat these threats, banks are not only enhancing their fraud prevention measures with AI-driven detection systems that monitor spending behaviours and identify suspicious activity in real-time, but also strengthening detection of inbound transaction fraud (Money Mule detection). By focusing on adaptive fraud models and real-time monitoring, banks are better equipped to respond to emerging scams.
“It is becoming almost impossible for even the most aware individuals to detect these types of scams, meaning the implementation of advanced AI detection systems provide the best chance to ensure they stay protected in today’s increasingly AI-driven digital world.”
