Romance fraud is on the rise.
Romance fraud occurs when criminals prowl dating sites, impersonate suitors and forge romantic relationships, often with older women, says J. Bennett, vice president of operations and corporate development at fraud protection retailer Signifyd Inc. The criminals then build the women’s trust over the course of months or, sometimes, years.
Once the criminals establish trust, they convince the women to send them expensive gifts. The criminals’ explanations for why they need physical goods include such things as they are stationed in Iraq or they moved to Kenya to become a businessman.
When the victim’s credit limit is maxed out or their cash on hand ran out, the criminals ask the women to buy gifts using the criminal’s credit card credentials, which are stolen cards. Sometimes the criminals have the victims ship the goods to themselves, and then provide a shipping label they can use to forward the goods onto the criminal. Some of the criminals set up their own online stores to sell the goods they had stolen.
Reports of romance fraud have doubled from 2015 to 2018, according to reports from the Federal Trade Commission. More than 21,000 reports of romance scams were reported in 2018, with consumers reporting a loss of $143 million. This is up from 2015, with 8,500 reports totaling $33 million in losses.
Signifyd recently uncovered a surge in romance fraud that occurred among a few of its online retailer clients, Bennett says. The vendor uncovered the fraud after one of the victims realized her relationship was a scam and she called her credit card company to issue a chargeback to recover the lost money. About 14 days later, the retailer turned to Signifyd to investigate.
Signifyd’s data analysts spent about a week examining the transactions’ attributes to determine what happened. During this period, more victims filed claims, which gave Signifyd more transactions to analyze with similar patterns, Bennett says. Ultimately, it identified dozens of women who were duped into purchasing expensive products, such as precious metals, electronics and camera equipment, from online retailers, and sending these items to criminals living overseas, often in Malaysia and Nigeria in this case.
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